Graph A below shows the market demand and supply of security personnel. Graph B below shows the MRP of labour (demand for labour) by a single firm that employs security personnel. Wage per hour Wage per hour 32 28 24 20 16 12 8 4 0 32 28 24 20 16 12 8 4 0 A B 500 1000 1500 2000 2500 3000 Quantity of labour D s 50 100 150 200 250 300 Quantity of labour D a. In a perfectly competitive labour market, what will be the market wage rate? How many workers will the single employer hire? Wage rate: $ 14 Quantity of workers hired: [ b. Suppose that a trade union of security workers is formed and is able to negotiate a wage rate of $20 per hour for its members. What will be the resulting surplus of workers? How many employees will the firm now hire? Surplus of workers: Quantity of workers hired:
Graph A below shows the market demand and supply of security personnel. Graph B below shows the MRP of labour (demand for labour) by a single firm that employs security personnel. Wage per hour Wage per hour 32 28 24 20 16 12 8 4 0 32 28 24 20 16 12 8 4 0 A B 500 1000 1500 2000 2500 3000 Quantity of labour D s 50 100 150 200 250 300 Quantity of labour D a. In a perfectly competitive labour market, what will be the market wage rate? How many workers will the single employer hire? Wage rate: $ 14 Quantity of workers hired: [ b. Suppose that a trade union of security workers is formed and is able to negotiate a wage rate of $20 per hour for its members. What will be the resulting surplus of workers? How many employees will the firm now hire? Surplus of workers: Quantity of workers hired:
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:Graph A below shows the market demand and supply of security personnel. Graph B below shows the MRP of labour (demand for
labour) by a single firm that employs security personnel.
Wage per hour
Wage per hour
32
28
24
20
16
12
8
4
0
32
28
24
20
16
12
8
4
0
500
A
D
1000 1500 2000 2500 3000
Quantity of labour
B
50 100 150 200 250 300
Quantity of labour
D
a. In a perfectly competitive labour market, what will be the market wage rate? How many workers will the single employer hire?
Wage rate: $ 14
Quantity of workers hired:
b. Suppose that a trade union of security workers is formed and is able to negotiate a wage rate of $20 per hour for its members. What
will be the resulting surplus of workers? How many employees will the firm now hire?
Surplus of workers:
Quantity of workers hired:
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