Unions often oppose increases in the prices of complementary inputs (for example,truck drivers may oppose increases in taxes on diesel fuel).They do this because increases in the prices of complementary inputs might:

Question

Quizplus · Accepted Answer

Increases in the prices of complementary inputs, such as diesel fuel for truck drivers, can lead to a decrease in the demand for the goods or services produced, which in turn can decrease the demand for labor used to produce those goods or services. This is known as the output effect.

Unions Often Oppose Increases in the Prices of Complementary Inputs