If there are powerful buyers in a labor market, the use of the supply and demand model to analyze labor markets

Question

Quizplus · Accepted Answer

The presence of powerful buyers, such as large corporations or unions, can distort the traditional supply and demand model in labor markets, making it inappropriate to apply in certain situations. These powerful buyers may have the ability to set wages or negotiate contracts in their favor, regardless of the supply and demand forces in the market.

If There Are Powerful Buyers in a Labor Market, the Use