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In a Contract Negotiation, Union Leaders Initially Demand a $2

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In a contract negotiation, union leaders initially demand a $2 per hour raise. Management does not want to give workers a raise at all. Eventually, both sides agree to a $1 per hour raise. This is an example of ________.


Definitions:

Excess Profits

Profits that exceed what is considered normal or expected, often realized in favorable market conditions or through monopolistic practices.

Free Markets

An economic system in which prices are determined by unrestricted competition between privately owned businesses, without government intervention.

Efficiency

The optimal allocation of resources to produce the maximum amount of goods and services, with the least waste of resources.

Pareto Optimality

Pareto Optimality is a state of allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off.

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