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Labor Markets and Monopsonies: There are 30 baseball teams In the league and each has a monopoly in the product market Demand curve in Product
Labor Markets and Monopsonies:
There are 30 baseball teams In the league and each has a monopoly in the product market
Demand curve in Product market for a baseball team: P(Q) = 200 -30Q
Production function for each team: Q(l) = 2(l) (l is players they will hire)
Aggregate supply curve for players: w(L) = 22 + L
- If the market is perfectly competitive, how do I find the equilibrium wage, equilibrium amount of talent hired, talent EACH team will hire, team surplus, and player surplus?
- If the league is now a MONOPSONIST how do I find the equilibrium wage, equilibrium amount of talent hired, talent EACH team will hire, team surplus, and player surplus?
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