Answer:
Firm will hire 1,600 units of labor thus, will decrease their labor hours by 200 due to increase in wage rate generate for the labor union
Explanation:
From $8 per hour to $10 per hour the labor demanded by the company's will decrease from 1,800 to 1,600
That's because the increase is arbitrary obtained through the pressure of strifes and other forms and not generated for an increase in productivity of the employees. As there is no increase in productivity the company's will hire less labor as it find the marginal benefit equal to zero in a lower quantity.
Only through increase in productivity the company will accept higher pay without decreasing their labor demand.
