A monopolist union that desired to maximize its total wage bill ( $\text { W.L }$ )would offer that quantity of labor for which
A)labor's marginal productivity is zero.
B)labor's wage falls to zero.
C)the quantity of labor hired is as great as possible given the firm's demand curve.
D)the marginal revenue from providing one more worker to the market is zero.

Question

Quizplus · Accepted Answer

For a monopolist union, the marginal revenue product of labor curve (MRPL) will be downward sloping. The union would want to maximize its total wage bill, which is the product of wage rate and the quantity of labor hired. Therefore, the union would want to hire workers up to the point where the marginal revenue from providing one more worker to the market is zero, which is the point where the MRPL curve intersects the marginal cost curve of the union. At this point, the union would be able to extract the maximum wage from the employer while ensuring that all the additional wage costs are covered by the marginal revenue generated by the last worker hired.

A Monopolist Union That Desired to Maximize Its Total Wage W.L \text { W.L } W.L

A Monopolist Union That Desired to Maximize Its Total Wage $\text { W.L }$