Suppose that there are two sectors in the economy: a unionized and a non-unionized one. The labor demand function in each sector is L=500,000-25w. There are 500,000 people available to supply their labor and their decision doesn't depend on the wage. People in both sectors are equally skilled and experienced for the job in either sector. Assume that the union sets a wage at the rate of $15,000 in the union sector.
Hint: for these questions below, use posted textbook solutions file for the end-of-the chapter 10 exercises.
Calculate how many people will the unionized sector be able to employ at most.