Suppose the economy consists of a union and a non union Suppose the economy consists of a union and.

Suppose the economy consists of a union and a non union
Suppose the economy consists of a union and a non-union sector. The labor demand curve in each sector is given by L = 1,000,000 – 20w. The total (economy-wide) supply of labor is 1,000,000, and it does not depend upon the wage. All workers are equally skilled and equally suited for work in either sector. A monopoly union sets the wage at $30,000 in the union sector. What is the union wage gap? What is the effect of the union on the wage in the non-union sector?

Suppose the economy consists of a union and a non union

 

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