7. A monopsonist’s demand curve for labor is given by w  12  2L, where w is the hourly wage rate and L is the number of person-hours hired.

a. If the monopsonist’s supply (AFC) curve is given by w  2L, which gives rise to a marginal factor cost curve of MFC  4L, how many units of labor will he employ and what wage will he pay?

b. How would your answers to part

(a) be different if the monopsonist were confronted with a minimum wage bill requiring him to pay at least $7/hr?

c. How would your answers to parts

(a) and

(b) be different if the employer in question