Suppose the United Automobile Workers union agrees to accept lower wages for members if the automobile manufacturers lower their prices to buyers

Will the UAW's measures usually result in a larger number of cars being sold and hence more jobs for UAW members? A) No, because people only buy new cars when they need them.
B) Not if the price elasticity of demand for new cars turns out to be less than one.
C) Only in the unlikely event the demand for new cars is unit elastic.
D) Probably not, because new car sales depend on advertising.
E) Yes.


E

Economics

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