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If firms will not agree to the wages demanded, a union can threaten that workers will:
ARetire
BRelocate
CRetrain
DStrike
Answer & Solution
Correct answer: D. Strike
1. Bargaining power needs a credible threat behind it.
2. The union negotiates for a wage above the equilibrium wage.
3. The union can threaten that, unless firms agree to the wages they demand, the workers will strike.
4. That threat is what gives collective bargaining its force.
_Source: OpenStax Principles of Microeconomics for AP Courses 2e (CC BY 4.0), Ch 15 'Labor Markets and Income'_
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