4. The craft unions (electricians, carpenters) possess considerable power to raise wages than do industrial unions (automotive workers, steel workers, etc. How would you explain this in terms of demand elasticity?);A union can increase prices because there will be only a small decrease in demand and total revenue will increase. When price elasticity of demand is unit elastic, changing the price will not change total revenue, since price and quantity will generally change in lock step with each other. Unions can set standards or rules in which unions can enforce to its members. Craft unions are usually self employed and serve a specific geographic region. Industrial unions coordinate between a large industry, price elasticity could impact price differently, if demand elasticity is too great people will not buy cars and industries may not be to afford the overhead.
Paper#29388 | Written in 18-Jul-2015Price : $22