Suppose the demand curve for union labor is given by the equation:L = 450 3W.

Suppose the current wage is $20. Now suppose the union is successful in raising the wage of its members to $28. At the same time, it is able to shift the demand for labor out to: L = 510 3W.

a. What was the original employment level? What is the new employment level?

b. Has the higher wage negotiated by the union reduced the employment opportunities of its members? If so, by how much?

c. Who has benefitted and who has lost as a result of this negotiation.Be specific and complete.