In: Economics
Unions might increase efficiency in the case where they
a. threaten a strike but don't actually follow through, so there are no lost hours of work.
b. lower the wage of local outsiders.
c. offset the market power of a large firm in a "company town."
d. raise the wage for insiders above the competitive equilibrium.
Option "c" is correct i.e offset the market power of a large firm in a "company town."
Trade union refers to the association of workers who form a legal unit or legal personhood. Who act as bargaining agent or as a legal representative for all the employees .
So if union want to offsets the market power of a large for main a company town they can increase efficiency.