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Jlenok [28]
3 years ago
6

What will be the effects on employment and wages if the union bargains for a wage rate above the equilibrium?

Social Studies
1 answer:
IgorLugansk [536]3 years ago
4 0

Answer: Unemployment will rise and Wages will fall.

Explanation:

Labor, much like any commodity follows the laws of demand and supply. When the wage rate is at equilibrium, the market forces are in agreement. The available labor and the demand by employers have dictated the fair rate.

However, if unions bargain for a rate above equilibrium, demand for labor will fall, resulting in unemployment, and wages will fall as there will be a surplus of labor.

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