Economics

Problem 3: Oligopsony. Assume that there are two teams in a league that compete against one another by simultaneously choosing a quantity of labor to hire. Each team is a monopoly in the product the demand curve given by: P(q) = 100 - q The production function for each team is given by: q( 0) = 1 where { is the quantity of labor that the team hires. The aggregate supply curve for talent is: w(L) = 20+ L where L is the total amount of talent hired by the two team: L = l1+12 a) Write out the profit function for team 1. b) Find each team's best response function. c) What is the equilibrium amount of labor for each team? d) What is the equilibrium wage? e) What is the profit for each team