Use the following to answer question(s): Wage-Employment Model in a Bilateral Monopoly Market

-(Exhibit: Wage-Employment Model in a Bilateral Monopoly Market) If this diagram portrayed a bilateral monopoly model in which the parties agreed on the employment level 0S, the equilibrium wage would be:

Question

Use the following to answer question(s): Wage-Employment Model in a Bilateral Monopoly Market
 
-(Exhibit: Wage-Employment Model in a Bilateral Monopoly Market) If this diagram portrayed a bilateral monopoly model in which the parties agreed on the employment level 0S, the equilibrium wage would be:

Quizplus · Accepted Answer

In a bilateral monopoly model, where one seller faces one buyer, the equilibrium wage is indeterminate without further information about the bargaining power of each party. The wage could be anywhere between the union's reservation wage and the firm's reservation wage, depending on negotiations.

Use the Following to Answer Question(s): Wage-Employment Model in a Bilateral