Figure 19-2
-Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium wage is $10. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $12.50, then there will be an excess
A)demand of 100 workers.
B)demand of 300 workers.
C)supply of 100 workers.
D)supply of 300 workers.

Question

Figure 19-2 
-Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium wage is $10. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $12.50, then there will be an excess
A)demand of 100 workers. 
B)demand of 300 workers. 
C)supply of 100 workers. 
D)supply of 300 workers.

Quizplus · Accepted Answer

When the wage is increased from $10 to $12.50, the quantity of labor supplied increases while the quantity of labor demanded decreases, resulting in an excess supply of 300 workers.

Figure 19-2 -Refer to Figure 19-2. This Figure Depicts Labor Demand and Labor