If a union establishes by collective bargaining a wage rate that is above a competitive market equilibrium wage rate, then

Question

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When a wage rate is set above the competitive market equilibrium, it means that the wage is higher than what the market would naturally determine based on supply and demand. As a result, more individuals will be willing to offer their labor at the higher wage, leading to an excess supply of labor, or in other words, more people wanting to work at that wage than there are jobs available. This does not lead to a shortage of labor, an increase in total employment, or necessarily prompt management to substitute labor for machinery, as those outcomes depend on other factors not directly related to the wage rate being above the market equilibrium.

If a Union Establishes by Collective Bargaining a Wage Rate