Use the following to answer questions 40-42:
Figure 13.5
-(Figure 13.5) The figure represents a labor union with wage in dollars and quantity of labor in hundreds of hours. If the labor union chooses to maximize total wages, the equilibrium wage will be:
A) $75.
B) $63.
C) $100.
D) $130.

Question

Use the following to answer questions 40-42:
Figure 13.5 
-(Figure 13.5) The figure represents a labor union with wage in dollars and quantity of labor in hundreds of hours. If the labor union chooses to maximize total wages, the equilibrium wage will be:
A) $75. 
B) $63. 
C) $100. 
D) $130.

Quizplus · Accepted Answer

To maximize total wages, the labor union will set the wage where the marginal revenue product of labor equals the wage rate. This typically occurs at the highest wage rate before the quantity of labor supplied starts to decrease, which is $100 in this scenario.

Use the Following to Answer Questions 40-42