Unionized workers may be able to negotiate with management for higher wages during periods of economic prosperity. Suppose that workers at automobile assembly plants successfully negotiate a significant increase in their wage package. How would the new wage contract be likely to affect the market supply of new cars?
a. Supply will not shift, but the quantity of cars produced per month will decrease.
b. Supply will shift to the right.
c. Supply will shift to the left.
d. Supply will not shift, but the quantity of cars produced per month will increase.
Ans: c. Supply will shift to the left.
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