3. A monopsonist's inverse demand for labor can be written as D-(w) = VMP(E) 0.005 Ep. Labor is supplied to the firm according to the inverse supply function s-'(w) s(E) = w = 5+0.01E,. = 40 %3D
3. A monopsonist's inverse demand for labor can be written as D-(w) = VMP(E) 0.005 Ep. Labor is supplied to the firm according to the inverse supply function s-'(w) s(E) = w = 5+0.01E,. = 40 %3D
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Question
![3. A monopsonist's inverse demand for labor can be written as D-'(w) = VMP(E) = 40 –
0.005ED. Labor is supplied to the firm according to the inverse supply function S-(w)
s(E) = w = 5+ 0.01E3.
%3D](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3ae55aea-4960-4906-8e16-4639682c0d75%2Fde4f6e4e-8c38-4186-8217-eb4dc89fb771%2Fcioou8p_processed.jpeg&w=3840&q=75)
Transcribed Image Text:3. A monopsonist's inverse demand for labor can be written as D-'(w) = VMP(E) = 40 –
0.005ED. Labor is supplied to the firm according to the inverse supply function S-(w)
s(E) = w = 5+ 0.01E3.
%3D
![(d) How much labor would the monopsonist approximately hire if it hired as if a perfectly
competitive firm does? At what wage rate would it hire workers approximately?
(e) Draw a graph.
(f) Approximately calculate producer surplus (PS), worker surplus (WS), and dead weight
loss (DWS) for (Enono: Wimono) and (E*, w*). State the implication of this exercise.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3ae55aea-4960-4906-8e16-4639682c0d75%2Fde4f6e4e-8c38-4186-8217-eb4dc89fb771%2Fzon7asr_processed.jpeg&w=3840&q=75)
Transcribed Image Text:(d) How much labor would the monopsonist approximately hire if it hired as if a perfectly
competitive firm does? At what wage rate would it hire workers approximately?
(e) Draw a graph.
(f) Approximately calculate producer surplus (PS), worker surplus (WS), and dead weight
loss (DWS) for (Enono: Wimono) and (E*, w*). State the implication of this exercise.
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