Th3.5: ^^ Monopoly in the Labour Market Flashcards
What does the existence of trade unions mean?
they can operate as the only seller of labour
What is a trade union?
an organisation with members who are usually workers or employees, which protects the rights and pay of workers through a process of collective bargaining
What is the first way they could increase wages?
they could set barriers of entry which would reduce supply
What is the second way they could increase wages?
set wages at a specific wage and ensure workers are not prepared to work for less, creating a kinked supply curve as seen in Graph 45 in our PP (they grey line)
Refer to PP
Look at Graph 45. Supply is perfectly elastic up to output of…
QS and if the company wanted to employ more than this they would have to increase wages further
Refer to PP
Look at Graph 45. The firm will employ where supply is…
equal to demand, at QDW2
Refer to PP
Look at Graph 45. What will both of these methods to increase wages lead to?
higher wages but cause a fall in employment from the perfectly competitive equilibrium of Q1W1
How has the government been able to reduce the power of trade unions?
through acts which have introduced postal ballots, outlawed secondary picketing, restricted the size of the picket line and forced unions to provide 14 days’ notice of action
Draw Graph 45 three times!
whoop whoop
