Consider the housing construction industry. Assume that the industry is perfectly competitive in both input and output markets. Suppose that, through collective bargaining, a labor union negotiates an industry-wide wage for various kinds of labor (electricians, plumbers, and so on). In particular, it succeeds in negotiating a wage increase for carpenters from $15 to $20 per hour.

The following graph shows the labor demand of an individual firm.

On the following graph, show what happens at the firm level as a result of the union negotiations.

\fGraph Input Tool 30 OWage 15 Rate 25 Supply (Dollars per hour) 20 Quantity Demanded 36 Quantity 360 Supplied (Thousands of (Thousands WAGE RATE (Dollars per hour) 15 workers) of workers) Excess 10 Supply Shortage Demand (Thousands of (Thousands O workers) of workers) 5 0 Demand Shifter 12 24 36 48 60 72 QUANTITY OF LABOR (Thousands of workers) Pro-union 0 Advertising (Millions of dollars)