A Union Representative Observed That If the Union Members' Wages

question 202

Multiple Choice

A union representative observed that if the union members' wages were increased by some proportion, the workers would eventually suffer a greater than proportional decline in employment. This statement could best be explained if

• A)the new wages are to take effect immediately.
• B)union labor can easily be replaced with capital.
• C)union labor is an insignificant portion of the total cost of production.
• D)the demand for the final product the workers produce is relatively inelastic.