The diagram illustrates the cost and revenue curves in the labour market for a firm operating under imperfect competition. Initially, the firm is in equilibrium in the factor market. What effect will this have on the wage rate and employment if a trade union secures a wage of W?
- Awage rate: fall from W3 to W; employment: remain the same at OR
- Bwage rate: fall from W4 to W; employment: increase from OQ to OR
- Cwage rate: rise from W1 to W; employment: increase from OQ to OR
- Dwage rate: rise from W1 to W; employment: remain the same at OQ