Economics (AS & A Level) · Oct / Nov 2023 · Paper 32 · Question 10

Firm K operates in a competitive market. Firm L is a monopsony employer. Both firms are operating at an equilibrium level of output. Trade unions are introduced with the result that wages in each firm are increased. What is the likely effect on each firm if trade unions enter the labour market?

1. Aemployment will decrease | employment will decrease
2. Bemployment will decrease | employment will increase
3. Cemployment will increase | employment will decrease
4. Demployment will increase | employment will increase

As printed in the paper