Contemporary Labor Economics 9th Edition by Campbell Mcconnell, Stanley Brue, David Macpherson, Robert Powell, David Colander

Exercise 2

Assume a firm (a) is a monopsonist in hiring labor and (b) is selling its product as a monopolist. Portray this market graphically. Correctly label all relevant curves, show the equilibrium wage rate and level of employment, and indicate the efficiency loss (if any).