Contemporary Labor Economics 9th Edition by Campbell Mcconnell, Stanley Brue, David Macpherson, Robert Powell, David Colander

Exercise 7

Evidence suggests that firms that sell their products in less competitive product markets are more likely to be unionized than firms selling in highly competitive markets. Recalling from Chapter 5 that the elasticity of product demand is an important determinant of the elasticity of labor demand, how might this affect (a) the elasticities of the union and nonunion demand curves in Figure 11.6 and (b) the net loss of output due to the union wage advantage