A Perfectly Competitive Industry in Long-Run Equilibrium Comprises 200 Identical

question 11

Essay

A perfectly competitive industry in long-run equilibrium comprises 200 identical firms. In one of the firms, the workers unionize and receive a 20% wage increase. What happens to the unionized firm in the short run and the long run? Supplement your answer with a graph.

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Definitions:

Benefit

Benefit refers to the positive impact or gain received from a product, service, or action, often used in comparison to costs to assess worthiness or efficacy.

Public Entertainment

Activities or performances, such as concerts, movies, or games, offered to the general public for enjoyment and leisure.

Dominant Strategy

A strategy that is best for a player in a game regardless of the strategies chosen by the other players.

Contribute

To give or supply something (such as money, resources, or ideas) towards a common purpose or fund.