Question
NOTE: it is a monopsony question Happy Hospital uses nurses (N) to produce treatments for its patients. It chooses its staffing of nurses to minimize
NOTE: it is a monopsony question
Happy Hospital uses nurses (N) to produce treatments for its patients. It chooses its staffing of nurses to minimize personnel costs, and its capital is fixed in the short run. Nurses are willing to work at a wage, w=2N. Hospitals production of treatments (T) is given by T=40N+10, and treatments are priced at $1 each
Write down Happy Hospital optimization problem. How many nurses will the hospital hire? How much will nurses earn in wages?
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Managerial Economics Theory Applications and Cases
Authors: Bruce Allen, Keith Weigelt, Neil A. Doherty, Edwin Mansfield
8th edition
978-0393124491, 393124495, 978-0039391277, 393912779, 978-0393912777
