If a Monopsony Must Negotiate with a Union, Then the Wage

question 326

Multiple Choice

If a monopsony must negotiate with a union, then the wage will probably be

• A) more than the value of marginal product.
• B) more than the marginal cost of labor.
• C) the same as if there had been no union.
• D) more than what it would have been without a union but not more than the value of marginal product.

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Definitions:

Labor Surplus

A situation where the supply of labor exceeds the demand for it, typically leading to higher unemployment rates.

Downsizing

The act of reducing the number of employees within a company, typically to cut costs or improve efficiency.

Natural Attrition

The reduction in workforce size through normal means, such as retirement or resignation, without the need for layoffs.

Labor Shortage

A situation where there are not enough qualified candidates to fill the available job positions within a market or industry.