Essay
A monopsonist uses only labor (L)to produce her output (Q)which she sells in a competitive market at the fixed price P=3. The production function is Q=15L2- 0.2L3 and the labor supply function is w=144+23.4L.
a)Determine the profit- maximizing values of L, Q, and w.
b)Explain why you have chosen the answer that maximizes profit instead of one that minimizes it.
Correct Answer:
Verified
a)L = 20 (not L = 4), Q= 4400,...View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q40: Discuss the effect of a head tax
Q41: The markets playing the most important role
Q42: Discuss the nature of the inefficiency of
Q43: A potential explanation for wage differences between
Q44: Martina has the following utility function: U(C,
Q46: The link between the redistribution and efficiency:<br>A)is
Q47: Historical records suggest that that the Black
Q48: The current prevalence of the market for
Q49: The topping- up mechanism:<br>A)insures Pareto optimality.<br>B)is the
Q50: An efficient transfer mechanism:<br>A)attempts to transfer as