Suppose That Management And Labor Are Bargaining Over The Distribution Of Excess

Suppose that management and labor are bargaining over the distribution of excess profits amounting to $200 per worker. Suppose that failure to reach an agreement an agreement reduces management’s share of the surplus by 5 percent per round and reduces labor’s share of the surplus by 7 percent per round. There is a potentially unlimited number of negotiating rounds and labor makes the First offer. How muchof the excess profits will go to labor?

A. $114

B. $86

C. $130

D. $70

E. $55

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