Employees of a firm become members of a trade union, and the union secures a higher wage rate for them. As a result, the firm employs more workers. What could account for this?
- AThe demand for the firm’s product is price-elastic.
- BThe firm is a monopsonist within its local labour market.
- CThe firm operates in a perfectly competitive labour market.
- DThere is a high degree of substitutability between capital and labour.