Question
Suppose the Labor Supply function for potential players is as follows 1 worker = $5,000 2 workers = $10,000 3 workers = $15,000 4 workers
Suppose the Labor Supply function for potential players is as follows
1 worker = $5,000
2 workers = $10,000
3 workers = $15,000
4 workers = $20,000
5 workers = $25,000
6 workers = $30,000
7 workers = $35,000
Suppose the Marginal Revenue Product (Labor Demand) is as follows.
First worker = $52,000 --Second worker $48,000--Third Worker = $44,000 Fourth Worker = $40,000-- Fifth Worker = $36,000 --Sixth Worker = $32,000--Seventh Worker = $28,000
How many workers would a profit-maximizing monopsonist hire? (for the exam you should also know the wage they would pay)
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