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PT Boekit Aoern (PT BA} is the only coal mining company in Province X and is a monopsonist in the labor market. The Supply of
PT Boekit Aoern (PT BA} is the only coal mining company in Province X and is a monopsonist in the labor market. The Supply of labor in Province X follows the function L = lw. where L is the quantity supplied of labor and w is the wage rate. Lahor productivity in digging coal is assumed to be constant at 2 tons per hour. Meanwhile, coal is sold at Ell} per ton. a. What is the optimal number of mining workers and wage level for PT EA? {El points} h. If the labor market is now competitive, or PT EA cannot exercise its monopsonv power. calculate the optimal number of workers and the wage rate. {5 points} c. Compare the calculation results in {a} and {h}, then show and explain the hvo conditions in one diagram. [5 points} cl. In a monopsonv market (as in question a], if the selling price of coal increases by 50%. will it affect the number of workers PT BA recruits? How does it affect worker wage? Explain and include calculations in your explanation. {7 points}
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