Exam 27:Factor Markets-Part A

If a monopsonist pays the wage rate w,then the amount of labor that he can hire is L(w)= Aw,where A is a positive constant.The marginal cost of labor to the monopsonist is

The labor supply curve faced by a large firm in a small city is given by w = 60 + 0.05L,where L is the number of units of labor per week hired by the large firm and w is the weekly wage rate that it pays.If the firm is currently hiring 1,000 units of labor per week,then the marginal cost of a unit of labor to the firm

A coal producer has a monopoly on coal.A different monopoly controls the railroad that takes the coal to market.Each monopolist chooses prices to maximize its profits.If the coal monopolist buys the railroad,then it will increase its profits by raising the market price of coal.