In the standard model of a monopoly union bargaining with the firm, it is typically assumed that
A)the union's sole objective is to increase the wage.
B)union leadership disregards the preferences of the rank and file.
C)unions never lead to an efficiency loss.
D)unions are willing to tradeoff some amount of higher earnings for greater employment.
E)unions and management secretly negotiate on the behalf of stockholders.

Question

Quizplus · Accepted Answer

In the standard model of a monopoly union bargaining with the firm, it is assumed that unions are willing to tradeoff some amount of higher earnings for greater employment. This is because the union members also care about employment levels, and a complete focus on higher wages could lead to unemployment or reduced employment.

In the Standard Model of a Monopoly Union Bargaining with the Firm