If a union succeeds in shifting the labour supply curve to the left,it can achieve wages above the

Question

Quizplus · Accepted Answer

By shifting the labour supply curve to the left, the union is reducing the number of workers available for employment. This leads to a decrease in equilibrium quantity of labour and a higher equilibrium wage rate. However, as the wage rate increases, some employers may decide to substitute capital for labour, reducing employment levels. Thus, the union may achieve wages above the competitive level, but it will reduce the level of employment as well.

If a Union Succeeds in Shifting the Labour Supply Curve