Suppose that management and labor are bargaining over the

Question

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. Approximately __________ of the excess profits will go to the shareholders?

$86

$90

$114

$70

$130

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. Approximately what percentage of the excess profits should management offer labor in the first round?

a.	35 percent
b.	60 percent
c.	57 percent
d.	43 percent
e.	45 percent