Use the following to answer question(s): Labor Market

-(Exhibit: Labor Market) Given competitive market demand curve D and initial union members supply curve S, the effect of a union reducing the supply of workers in the factor market is illustrated by a:

Question

Use the following to answer question(s): Labor Market
 
-(Exhibit: Labor Market) Given competitive market demand curve D and initial union members supply curve S, the effect of a union reducing the supply of workers in the factor market is illustrated by a:

Quizplus · Accepted Answer

The correct answer is D because when a union reduces the supply of workers in the factor market, it will cause a shift in the supply curve to S′, as shown in the exhibit. This is because the union members who are no longer supplying their labor will be represented by a new supply curve, which is shifted to the left of the initial supply curve. The demand curve remains unchanged in this scenario, as there is no change in the demand for labor.

Use the Following to Answer Question(s): Labor Market