Joe Is the Owner of a Manufacturing Company Called ProfitMax

question 12

Essay

Joe is the owner of a manufacturing company called ProfitMax.Joe finds out that a union is attempting to organize the employees at ProfitMax.Joe tells you that he will never deal with a union and that he has no plans to pay a higher wage if the union is elected.Joe has plans to tell his supervisors that they may not encourage union activity.Joe has plans to do surveillance regarding which employees attend union meetings so that he can fire them.He is also going to announce to all employees that they will get a raise if they vote against the union.He asks you what his obligations are if the union gets elected and if his other plans are legal.He also wants to know what he can expect from his supervisors,some of whom he is suspicious of supporting the union.What would you tell him?

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Definitions:

Total Surplus

The total net gain to society from creating and consuming a product or service, encompassed by the combination of consumer and producer surplus.

Deadweight Loss

An inefficiency in the economy that results when the market equilibrium for a good or service isn't attained or is unattainable.

Tariff

A tax imposed on imported or, less commonly, exported goods with the aim of raising the cost to influence trade dynamics.

Domestic Consumers

Individuals or households within a country who purchase goods and services for personal use.