Question

In: Economics

Suppose the goal of a union is to maximize the total income of all workers it...

Suppose the goal of a union is to maximize the total income of all workers it represents. In this case it will probably aim for a wage at which the elasticity of demand for workers is

a.

0.

b.

infinite.

c.

1.

d.

ranging from 2 to 5.

Solutions

Expert Solution

Maximization of total wage income of all workers is equivalent to maximizing revenue.

We know that Revenue is maximized when elasticity of demand for workers is 1.

So,

Correct option is

c. 1

Rahul Sunny answered 1 year ago
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