In which situation might a union actually improve efficiency?

1. A Option A: When it offsets the market power of a large firm that is the dominant employer in a region
2. B Option B: When it lowers the wage of local outsiders
3. C Option C: When it threatens a strike but does not follow through, so no hours of work are lost
4. D Option D: When it raises the wage for insiders above the competitive equilibrium

Answer checked 11 October 2026 · How we write and check questions