Suppose there is a competitive market for retail workers at a large shopping mall that is large enough to constitute its own labour market.The labour demand curve is Q_D= 1000 - 20(w).The labour supply curve is Q_S= 400 + 40(w).Suppose that a union now successfully organizes the workers at this mall and obtains a wage rate of $11 (but does not affect the demand curve).One result is

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At wage rate $11, the quantity of labour supplied is: Q_S = 400 + (40 × 11) = 840 The quantity of labour demanded is: Q_D = 1000 - (20 × 11) = 780 Since the quantity of labour supplied exceeds the quantity demanded (840 > 780), there will be an excess supply of labour, which will lead to unemployment. Thus, employment will decrease by 20 workers.

Suppose There Is a Competitive Market for Retail Workers at a Large