Lesson 04.04 Wages

Lesson 04.04 Wages - union, they could negotiate for a...

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Lesson 04.04: Wages: Minimum Wages, Bilateral Monopolies, and Unions Nonunion college athletes in the market would face having to work for the wage W M for their services. This wage price is the price the monopsony set, which is lower than the market (or equilibrium) price W C (also W E ). However, if the college athletes formed a
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Unformatted text preview: union, they could negotiate for a higher wage, which would be W U . However, the equilibrium number of college athletes would stay the same. Also, difference between earnings and the marginal revenue product of labor for the monopsony at the wage W U would be significantly less than if it was at the price W M ....
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