Which of the following factors would allow a union to raise wages while losing fewer jobs?
A) The demand for output becomes more elastic due to world competition.
B) Labor costs are a large share of the total cost of producing output.
C) The opening up of other markets around the world where output can also be produced
D) Modernizing plants is unlikely because the demand for output is not growing.

Question

Quizplus · Accepted Answer

If modernizing plants is unlikely due to stagnant demand, there is less incentive for firms to replace labor with capital, allowing unions to raise wages with minimal job loss.

Which of the Following Factors Would Allow a Union to Raise