2) Monopsony and the Minimum Wage Schruteville is a company town, and the only purchaser of labor in the region is the Schrute Beet Growing Conglomerate (SBGC), who farms beets to sell in the market for beets. SBGC employs only labor, and labor is their only expenditure. Because they are the only purchaser of labor in Schruteville (they're a monopsony), they may either choose to pay low wages and hire just a few workers, or pay higher wages to induce more workers to farm beets. Note that the market for beets is competitive, so SBGC must accept the market price of $30 for beets. Output Labor Price Output TR MR Wage Hours TC MC Profit 30 10 10 5 50 30 11 12 6 72 30 12 14 7 98 30 13 16 8 128 30 14 18 9 162 30 15 20 10 200 30 16 22 11 242 30 17 24 12 288 30 18 26 13 338 Note: TR = "Total Revenue", MR = "Marginal Revenue", TC = "Total Cost", MC = "Marginal Cost" A. Fill in the following columns on the table above: TC, TR, MR, MC. B. Assuming SBGC is a profit-maximizing firm, how many hours of labor should they hire? C. Fill in the "Profit" column to confirm that this is indeed a profit maximizing level of labor to employ (in other words, they can't earn strictly more profits by employing a different number of workers).D. Compare the wage rate to the value of the marginal product oflabor. Which is greater [or are they equivalent)? E. Now. suppose that the mayor of Schruteville decides to impose a minimum wage rate of $20. On the chart below. ll in 5868's total cost. marginal cost. and prot. Assume prices and revenues are the same as in your earlier chart Wage Labor Hours TC MC Prot 20 5 F. What happens to the quantity oflabor employed after the minimum wage is imposed? Compare this to the effect of a [binding] minimum wage in a competitive market. 6. What happens to- worker surplus as a result of the minimum wage? H. What happens to total surplus as a result ofthe minimum wage? (Compared to the baseline monopsony case without the minimum wage. You don't have to calculate anything here, just explain why the total surplus changes here in the direction it changes.)