In some markets plumbers have a choice of joining unions or working as nonunion plumbers. The total short-run supply of plumbers is perfectly inelastic at 500 workers per day. The demands for nonunionized and unionized plumbers, respectively, are: WNU = 30-0.04L and WU=30-0.10L. The wage rate is W in $/hr. and the number of workers per day is L. (Pindyck) a. Determine the total demand for plumbers. b. Calculate the total market wag
In some markets plumbers have a choice of joining unions or working as nonunion
plumbers. The total short-run supply of plumbers is perfectly inelastic at 500 workers per day.
The demands for nonunionized and unionized plumbers, respectively, are: WNU = 30-0.04L and
WU=30-0.10L. The wage rate is W in $/hr. and the number of workers per day is L. (Pindyck)
a. Determine the total
b. Calculate the total market wage rate of plumbers assuming that unionized and
nonunionized plumbers get the same wage rate.
c. If the unionized workers succeeded in getting their wage increased to $20.00 per
hour, how many unionized workers would lose their jobs?
d. If the unionized workers in (c) who lost their jobs take jobs as non-unionized
workers, how much and in what direction would non-unionized wages change?
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