If an industry were strongly unionized and the firms in that industry were not p
ID: 1118043 • Letter: I
Question
If an industry were strongly unionized and the firms in that industry were not permitted to hire nonunion labor, what would likely occur if health insurance premiums sharply increased?
A. The burden of higher industry prices would fall entirely on the firms and have no effect on the unionized workforce.
B. Foreign competitors would cause the firms to lose sales and profits.
C. Even if there was no foreign competition, higher prices would cause a loss of sales, and there would be fewer jobs in the industry.
D. B and C
Explanation / Answer
Answer.) C. Even if there was no foreign competition, higher prices would cause a loss of sales, and there would be fewer jobs in the industry.