Suppose the United Steel Workers Union succeeds in raising wages in the steel industry.Employment in the steel industry will remain approximately constant if, other things being equal:

Question

Quizplus · Accepted Answer

Each of the conditions described in options A, B, and C contributes to a scenario where employment in the steel industry could remain approximately constant despite wage increases. A) If the demand for steel is inelastic, raising prices won't significantly reduce the quantity of steel sold, thus maintaining the demand for labor. B) If labor costs are a small percentage of the final cost, wage increases have a minimal impact on the overall cost structure, allowing employment levels to remain stable. C) If it's technically difficult to substitute capital for labor, firms are less likely to replace workers with machines in response to wage increases, helping to preserve jobs.

Suppose the United Steel Workers Union Succeeds in Raising Wages