Y6

75. (75, 76, 77, 78) Assume a competitive industry in both output and the only input, labour. Each firm has Q- 400 L - LZ MPL - 400 -2 L Assume there are 1,000 industry-specific workers who will work at any offered wage. The industry has 20 firms. Assume that firms will pay a wage equal to the workers' value marginal product of labour. The price of a unit of output is $4.00 What are Ly and firm revenue? a. (70. $50,000) (50. $70,000) b. (50, $60,000) d (100, $100,000) 76. What is total industry profit in the above question? $10,000 C. $1.400.000 b. $200,000 d. Szero 77. Now assume that the number of firms drops to 10. How much extra profit does each firm now carn? A. $30,000 C. 510,000 b. $40,000 $20,000 78. Recall that welfare in this model is the sum of profits and wages paid. What is the loss of welfare in going from 20 to 10 firms? a. $100,000 $300.000 b. $200.000 $400.000