How does competition from nonunion firms and foreign producers affect the ability of a union to increase the wages of its members?
a. Such competition reduces the ability of a union to achieve wage increases.
b. Such competition does not affect the ability of a union to achieve wage increases.
c. Such competition will increase the strength of a union if it produces a product sold in the domestic market but reduce the strength of the union if it produces an export product.
d. The effect of this type of competition will be entirely dependent on the elasticity of demand for labor in the domestic market.
A
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According to the New Classical theory, why may output differ from its full-employment level in the short run?
What will be an ideal response?
A cellphone maker sells 6,000 units per month at $600 each. The firm is investigating whether a price cut to $500 is warranted. The firm’s marginal cost of production of each phone is a constant $400 per unit. To maintain profits at their current level, quantity sold must increase to at least
A. 8,000 B. 10,000 C. 12,000 D. 15,000