In a recent contract negotiation over the issue of wage increases, the union's resistance point was 2.5% and their target point was 3%. Management's resistance point was 3% and their target point was 2.75%. The size of the settlement range is:
A) 25%
B) 75%
C) 50%
D) Cannot be calculated from this example

Question

Quizplus · Accepted Answer

The size of the settlement range is the difference between the two parties' resistance points, which in this case is 0.5% for both (2.5% - 3% for the union and 3% - 2.75% for management). Therefore, the range is 0.5% on either side of the target points, resulting in a 50% settlement range (0.5%/3% = 0.1667 or 16.67%, and 0.5%/2.75% = 0.1818 or 18.18%).

In a Recent Contract Negotiation Over the Issue of Wage