The shape of the demand curve is important, because it influences a union's ability to raise wages without significantly affecting employment levels. What is this effect called?

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The effect described is known as the "wage-employment trade-off" - if the demand curve for labor is relatively elastic (i.e. a small change in wages causes a large change in employment levels), then a union may not be able to increase wages without causing significant layoffs. However, if the demand curve is relatively inelastic (i.e. a change in wages has a smaller effect on employment levels), then a union may be able to successfully negotiate higher wages without causing major job losses. Wage elasticity (B) refers to the degree to which demand for labor is affected by changes in wages, but does not specifically address the impact on employment. The substitution effect (C) refers to the tendency of employers to substitute cheaper forms of labor (e.g. automation, outsourcing) in response to higher wages, but again does not directly address the impact on employment levels. Labour intensity (D) is not a relevant concept in this context.

The Shape of the Demand Curve Is Important, Because It