Refer to Figure 19-2. This figure depicts labor demand and supply in a nonunionized labor market. The original equilibrium wage is $10. If a labor union subsequently establishes a union shop and negotiates an hourly wage of $12.50, then there will be an excess

A) demand of 100 workers.
B) demand of 300 workers.
C) supply of 100 workers.
D) supply of 300 workers.

Excess Supply

The situation in a market where the quantity of a good or service offered by producers exceeds the quantity demanded by consumers at the prevailing price.

Union Shop

A workplace where all employees must become members of a labor union within a specified period after being hired.

Negotiates

The process by which parties come together to discuss, bargain, and reach a mutually acceptable agreement.