If unions are successful in negotiating a wage higher than the market equilibrium wage,and also guarantee employers that they can hire as many labor hours as they desire per week at the union wage,
A)the quantity of labor demanded will exceed the quantity supplied at the union wage.
B)the quantity of labor demanded will equal the quantity supplied at the union wage.
C)the quantity of labor demanded will fall short of the quantity supplied at the union wage.
D)all workers who join the union will be guaranteed a job.

Question

Quizplus · Accepted Answer

Since the union negotiated a wage higher than the market equilibrium wage, the quantity of labor supplied will increase while the quantity of labor demanded will decrease. Therefore, the quantity of labor demanded will fall short of the quantity supplied at the union wage. The guarantee of hiring as many labor hours as desired will not be relevant in this situation as employers will not demand as many labor hours at the union wage due to the shortage of demand for labor.

If Unions Are Successful in Negotiating a Wage Higher Than