Question
1. A monopsonist has the production function Q=4L and faces the following labor supply and product demand equations respectively. W=2+0.05L P=100.025Q How much labor should
1. A monopsonist has the production function
Q=4L
and faces the following labor supply and product demand equations respectively.
W=2+0.05L
P=100.025Q
How much labor should the firm hire in order to maximize profits if they mark their price 300% above marginal cost? Answer is not 10
2.
A monopsonist has the production function
Q=4L
and faces the following labor supply and product demand equations respectively.
W=2+0.05L
P=100.025Q
What wage rate should the firm pay in order to maximize profits if they mark their price 300% above marginal cost? Answer is not 2.5
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