Suppose That Management and Labor Are Bargaining Over the Distribution

Multiple Choice

Suppose that management and labor are bargaining over the distribution of excess profits amounting to $200 per worker. Suppose that failure to reach an agreement an agreement reduces management's share of the surplus by 5 percent per round and reduces labor's share of the surplus by 7 percent per round. If there is an unlimited number of negotiating rounds, how much of the excess profits will go to labor?

A) Around $76 per worker.
B) Around $86 per worker.
C) Around $114 per worker.
D) Around $124 per worker.
E) Around $148 per worker.