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Trade union (Drawbacks (Unions can impede technological progress…
Trade union
Drawbacks
If demand and supply are elastic, then the lost wage income from a contraction in demand will be less than the increase in wages earned from collective bargaining. Thus, OVERALL INCOME DECREASES. - SEE POWERPOINT
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Advantages
If demand and supply are inelastic, then the lost wage income from a contraction in demand will be less than the increase in wages earned from collective bargaining. Thus, OVERALL INCOME INCREASES. - SEE POWERPOINT
Counter balances monopsonist power in a bilateral monopoly, i.e. single seller (monopoly) and buyer (monopsonist). Example: coal mining monopsonist and the miners unions in the 1980's.
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If higher wages occur, productivity may increase
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