The Union Representing the Bread Makers at the Hostess Bread

question 379

Multiple Choice

The union representing the bread makers at the Hostess Bread Company went on strike and demanded higher wages than what the firm wanted to pay. I. If the firm is in a competitive labor market the union can only raise wages by decreasing employment.
II) If the firm is a monopsony in the labor market the union can only raise wages by decreasing employment.
III) If the firm is a monopsony in the labor market the union can both raise wages and increase employment.

• A) I only
• B) II only
• C) I and II
• D) I and III

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