In a monopoly labor market,the optimal union wage can be read off the marginal revenue product curve.

Question

Quizplus · Accepted Answer

In a monopoly labor market, the firm has control over the level of wages paid to workers. The optimal union wage is the wage rate that maximizes the total surplus (sum of consumer surplus and producer surplus) in the market. This is achieved when the wage rate is set equal to the marginal revenue product of labor, which can be read off the marginal revenue product curve. Therefore, the statement is true.

In a Monopoly Labor Market,the Optimal Union Wage Can Be