Final answer:
The correct option is a. A bilateral monopoly in a labor market has a union on the supply side and a monopsony on the demand side. It leads to a lower level of employment and an indeterminate outcome for the equilibrium wage.
Step-by-step explanation:
A bilateral monopoly is a labor market with a union on the supply side and a monopsony on the demand side. In a perfectly competitive labor market, both the wage and employment levels are determined by the interaction of supply and demand.
However, in a bilateral monopoly, the equilibrium level of employment will be lower compared to a competitive labor market. The equilibrium wage, on the other hand, could be higher or lower depending on the bargaining power of the union and the monopsony. The union typically favors a higher wage, while the monopsony favors a lower wage.