13.3 When the wage rate is $9 per hour in each market, 25 fewer workers will be...

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13.3 When the wage rate is $9 per hour in each market, 25 fewer workers will be employed in the nonunionized market and 25 more in the unionized market. The loss in output from removing 25 workers from the nonunionized market is the sum of the VMPs of those workers, which is the shaded area in the right panel of the figure below. This area is $187.50 per hour. (Hint: To calculate this area, first break the figure into a rectangle and a triangle.) The gain in output from adding 25 workers to the unionized market is the shaded area in the left panel, which is $262.50 per hour. The net increase in output is thus $262.50 $187.50 $75 per hour.

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