The following figures depict the impact of labour unions on the equilibrium in the WS-PS model. Which of the following statements are correct?

Question

Accepted Answer

The long-run
impact is higher structural unemployment and
an unchanged wage for the employed: There is a new Nash equilibrium at point
E′.

Accepted Answer

In the short run, the wage-setting curve shitfs upwards and all employed workers receive a higher wage (point C).

Answer

The long-run impact is lower structural unemployment and an unchanged wage for the employed: There is a new Nash equilibrium at point E.

Answer

In the short run, the wage-setting curve shitfs downwards and all employed workers receive a higher wage (point C).

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