Assumptions: These two graphs show two sectors of the labo…
Assumptions: These two graphs show two sectors of the labor market for a particular kind of labor. Relevant product markets are competitive. The two labor demand curves are identical and initially the quantities of labor employed in the two sectors are L1 and L’1 and the wage rate in each sector is Wn.Refer to the diagrams and assumptions. If all the workers who lose their jobs in the union sector because of a Wn to Wu union wage increase are reemployed in nonunion sector 2, output in that sector will:
Read Details