The following figure shows the demand [D],marginal revenue [MR],and supply [S] curves in the market for labor.
Figure 17-2
-Refer to Figure 17-2.If union members cartelize the supply side of the market,the economic rent that accrues to the union is represented by the area _____.

Question

The following figure shows the demand [D],marginal revenue [MR],and supply [S] curves in the market for labor.
Figure 17-2 
-Refer to Figure 17-2.If union members cartelize the supply side of the market,the economic rent that accrues to the union is represented by the area _____.

Quizplus · Accepted Answer

The economic rent that accrues to the union is represented by the area between the union wage rate (W2) and the competitive wage rate (W1) over the quantity of labor employed (L2), which is area W2ACF.

The Following Figure Shows the Demand [D],marginal Revenue [MR],and Supply