If a single large employer bargains with an inclusive union, the resulting labor market model can best be described as
A) a cartel.
B) countervailing power.
C) a bilateral monopoly.
D) an internal labor market.

Question

Quizplus · Accepted Answer

A single large employer bargaining with an inclusive union is called a bilateral monopoly because there is only one seller (the employer) and one buyer (the union) in the labor market. Both parties have some degree of monopoly power, and negotiations will determine the wage rate and level of employment. A cartel (A) involves multiple firms working together to fix prices, countervailing power (B) refers to the balance of power between competing industries or groups, and an internal labor market (D) refers to the practice of promoting and hiring employees within a company rather than seeking external candidates.

If a Single Large Employer Bargains with an Inclusive Union