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annyan annyan
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2 years ago
Economists observe clear evidence of a union wage premium but do not observe the clear union effect on employment levels predicted from theory. One explanation for this is

▸ that the labour supply curve, in the presence of a union, is very inelastic, which implies only a very small effect on employment.

▸ that the labour supply curve shifts to the right in the collective bargaining process, thereby eliminating any employment effect.

▸ that union-based advertising for the product increases demand for the product, shifts the demand curve to the right and eliminates any employment effect.

▸ the union's ability, through the collective bargaining process, to pressure firms to hire more workers than they otherwise would at the union wage.

▸ Both C and D are correct.
Textbook 
Microeconomics

Microeconomics


Edition: 17th
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dongdong
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annyan Author
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2 years ago
Thank you, thank you, thank you!
lierac00
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Thanks for your help!!
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2 hours ago
Just got PERFECT on my quiz
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