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Labour Contract Agreement
If labor’s demand is within the company’s Starting Position and Negotiation Ceiling, negotiations lead to an agreement. Company 2’s negotiators have instructions to issue a Starting Position of $23.00 and a Negotiation Ceiling is $25.30. Company 2’s negotiation range brackets labor’s demand. They will agree at $23.50, halfway between the $23.00 Starting Position and labor’s demand of $24.00 (figure below).
Company 2 Agreement: Company 2’s Starting Position ($23.00) and Negotiation Ceiling ($25.30) bracket Labor’s demand of $24.00. Negotiators settle at a wage of $23.50, halfway between $23.00 and $24.00– there is no strike.
