Microeconomics 18th Edition by Campbell McConnell, Stanley Brue, Sean Flynn

Exercise 10

Assume a monopsonistic employer is paying a wage rate of W m and hiring Q m workers, as indicated in Figure 13.8. Now suppose an industrial union is formed that forces the employer to accept a wage rate of W c. Explain verbally and graphically why in this instance the higher wage rate will be accompanied by an increase in the number of workers hired.
Reference Figure 13.8.