Consider a third pricing scheme that the union in Solved Problem 12.2 might use. It sets a wage, , and lets the firms hire as many workers as they want (that is, the union does not set a minimum number of hours), but requires a lump-sum contribution to each worker’s retirement fund. What is such a pricing scheme called? Can the union achieve the same outcome as it would if it perfectly price discriminated? (Hint: It could set the wage where the supply curve hits the demand curve.) Does your answer depend on whether the union workers are identical?
Consider a third pricing scheme that the union in Solved Problem 12.2 might use. It sets a wage, 
, and lets the firms hire as many workers as they want (that is, the union does not set a minimum number of hours), but requires a lump-sum contribution to each worker’s retirement fund. What is such a pricing scheme called? Can the union achieve the same outcome as it would if it perfectly
Solved Problem 12.2
Competitive firms are the customers of a union, which is the , or they can hire no one. Show that by setting 
appropriately, the union can achieve the same outcome as if it could perfectly price discriminate.
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