Comfort Hosiery Inc. is the only employer of labor in town.

A. Identify the market structure in which Comfort Hosiery hires labor.

B. Draw a correctly labeled graph of the labor market for Comfort Hosiery and identify the following:

i. The quantity of labor employed, labeled QM

ii. The wage rate Comfort Hosiery will pay, labeled WM

C. Suppose the government breaks up Comfort Hosiery into many smaller firms, creating a perfectly competitive labor market. On your graph from part a, label the new equilibrium quantity and employment QC and the new wage rate WC.