If a firm operates in a competitive industry and its unionized labor force is successful in bargaining for a wage increase, where is the firm likely to get the money to pay the higher wages?
If it is a competitive industry, the owners are likely to be earning the normal return, so paying out of profits would not be an option. Also, competition limits the firm's ability to raise its price and pass along the increase to consumers. It is most likely that the firm will cut other costs. A strong possibility is that this will result in fewer employees.
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Suppose the inflation rate target is "0" and the long run federal funds target is also "0." Calculate the federal funds rate if the current inflation rate is 5% and real output is 4.5% below trend output
A) 2.25% B) 5.25% C) 0.5% D) 0.25%
One difference between economic and social regulation is that economic regulation usually pertains to a specific industry, whereas social regulation applies to most if not all industries
a. True b. False Indicate whether the statement is true or false