Figure 45.4
-In Figure 45.4, when compared to the perfectly competitive equilibrium, the wage paid to employees as a result of unionization

Question

Quizplus · Accepted Answer

In Figure 45.4, the wage paid to employees as a result of unionization increases from W* to W' because unions negotiate for higher wages, better benefits, and improved working conditions for their members. This results in the shift from the perfectly competitive equilibrium (point a) to the unionized wage equilibrium (point b) where workers receive higher wages and firms face higher labor costs. Therefore, the correct answer is A.

Figure 45.4 -In Figure 45.4, When Compared to the Perfectly Competitive Equilibrium