If a union succeeds in forcing employers in a perfectly competitive product market to increase wages above the equilibrium level, then the level of unemployment
A) will increase.
B) will remain constant.
C) will decrease.
D) may increase or decrease.

Question

Quizplus · Accepted Answer

In a perfectly competitive product market, wages are determined by the equilibrium of supply and demand. If a union successfully forces wages above this equilibrium level, employers will hire fewer workers due to the increased cost of labor. This will result in an increase in unemployment.

If a Union Succeeds in Forcing Employers in a Perfectly