Question
Labour Demand with Perfect Competition in the Labour Market and Monopoly in the Output Market in Short Run. You are the manager of a business
Labour Demand with Perfect Competition in the Labour Market and Monopoly in the Output Market
in Short Run.
You are the manager of a business that operates as a Monopolist in the output market, and it has
perfect competition in the local labour market.
The production function of the business is given by: Q = 10L.
As a Monopolist, the firm faces a market demand given by: P = 10,000 - 2Q.
The wage rate in the labour market is $10
a) Calculate the equilibrium number of units of labour employed in short run.
b) What is the advantage of being a Monopolist for a firm?
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Managerial economics applications strategy and tactics
Authors: James r. mcguigan, R. Charles Moyer, frederick h. deb harris
12th Edition
9781133008071, 1439079234, 1133008070, 978-1439079232
