Table 14.12 shows the quantity demanded and supplied in the labor market for driving city buses in the town of Unionville, where all the bus drivers belong to a union.

Table 14.12

a. What would the equilibrium wage and quantity be in this market if no union existed?

b. Assume that the union has enough negotiating power to raise the wage to $4 per hour higher than it would otherwise be. Is there now excess demand or excess supply of labor?

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Wage Per Hour $14 $16 $18. $20 $22 $24 Quantity of Workers Demanded 12,000 10,000 8,000 6,000 4,000 2,000 Quantity of Workers Supplied 6,000 7,000 8,000 9,000 10,000 11,000