The inverse labor demand function is W = 200 – 2L, where W is the wage and L is labor. Labor revenue is WL, and labor supply is W = 2L. (a) Suppose that the labor market is competitive. What is the wage? Employment? (b) Now suppose that a union dominates the labor market. What is the wage? Employment? (c) What do you conclude about the impact of unions on labor markets?
The inverse labor demand function is W = 200 – 2L, where W is the wage and L is labor. Labor revenue is WL, and labor supply is W = 2L. (a) Suppose that the labor market is competitive. What is the wage? Employment? (b) Now suppose that a union dominates the labor market. What is the wage? Employment? (c) What do you conclude about the impact of unions on labor markets?
Chapter11: Labor Markets
Section: Chapter Questions
Problem 4SQ
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The inverse labor demand function is W = 200 – 2L, where W is the wage and L is labor. Labor revenue is WL, and labor supply is W = 2L.
(a) Suppose that the labor market is competitive. What is the wage? Employment?
(b) Now suppose that a union dominates the labor market. What is the wage? Employment?
(c) What do you conclude about the impact of unions on labor markets?
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