Suppose an economy consists of a union and a nonunion sector. The labour demand curve in each sector is given by: E= 600 - 15w   where w is the hourly wage and E is the level of employment. The total labour supply is inelastic and equal to 600. Workers are equally skilled and can be employed either in the union or the nonunion sector.

Exploring Economics
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ISBN:9781544336329
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Chapter16: The Markets For Labor, Capital, And Land
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Suppose an economy consists of a union and a nonunion sector. The labour demand curve in each sector is given by: E= 600 - 15w

 

where w is the hourly wage and E is the level of employment. The total labour supply is inelastic and equal to 600. Workers are equally skilled and can be employed either in the union or the nonunion sector.

 

How do you find the competitive wage in this economy?

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