When an employer that controls the demand for labor opposes a union that controls the supply of labor,it is called
A)an oligopoly.
B)an oligarchy.
C)a bilateral monopoly.
D)a monopsony.

Question

Quizplus · Accepted Answer

When an employer controls the demand for labor and a union controls the supply of labor, it creates a situation of bilateral monopoly. This means that both parties have significant bargaining power, which may lead to negotiations and potential conflicts. The employer has a monopsony power due to its control over the demand, while the union has a monopoly power as it can control the supply of labor. This situation can result in a wage rate higher than the equilibrium wage rate in a perfectly competitive market.

When an Employer That Controls the Demand for Labor Opposes