4. A firm produces output, measured by Q, which is sold in a market in which the price P = 20, regardless of the size of Q. The output is produced using only one input, labor (measured by L); the production function is Q(L) = L. There are many suppliers of labor, and the supply schedule is w = 2L, where w is the wage rate. The fim is a monopsonist in the labor market. a. What wage rate will the monopsonist pay? b. How much extra profit does the firm earn when it pays labor as a monopsonist instead of paying the wage rate that would be observed in a perfectly competitive

4. A firm produces output, measured by Q, which is sold in a market in which the price P = 20, regardless of the size of Q. The output is produced using only one input, labor (measured by L); the production function is Q(L) = L. There are many suppliers of labor, and the supply schedule is w = 2L, where w is the wage rate. The fim is a monopsonist in the labor market. a. What wage rate will the monopsonist pay? b. How much extra profit does the firm earn when it pays labor as a monopsonist instead of paying the wage rate that would be observed in a perfectly competitive

Managerial Economics: A Problem Solving Approach

5th Edition

ISBN:9781337106665

Author:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Publisher:Luke M. Froeb, Brian T. McCann, Michael R. Ward, Mike Shor

Chapter9: Market Structure And Long-run Equilibrium

Section: Chapter Questions

Problem 2MC

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A flour mill buys its wheat from two different farms, then processes the wheat into flour. Wheat from Farm X costs the mill $7 per bushel, and wheat from Farm Y costs the mill $15 per bushel. The selling price (in dollars per bushel) for the mill's wheat can be modeled by p(x, y) = 500 x y where x is the demand for the flour milled from Farm X's wheat and y is the demand for flour milled from Farm Y's wheat. Assume that x and y may be zero (so the mill only buys from one of the suppliers) and that the mill can by 1/2 of a bushel. Then the maximum profit is attained when x = y = bushels bushels The amount of the flour mill's maximum profit is $
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Is it possible to solve this question for an industrial economics? How can the cross elasticity of demand be used and linked to the market elasticity of demand in: 1) Discovering the degree of the firm's experiences with the pricing policy of other firms. 2) Knowing the market structure
b,c,d would be amazing. THank you
Consider a perfectly competitive market with the market demand functionQd = 1000 − 10pThere are many small, identical firms in the market. Each firm has the marginal cost function:MC = 10 + 10qand the average total cost function:ATC = 45/q + 10 + 5q(a) Suppose the equilibrium price is currently 30 (in the short run). Determine the quantity sold by eachfirm, the market equilibrium quantity, and the number of firms there must be in the market. Hint: Onceyou know the market quantity and quantity per firm, you can back out the number of firms.(b) If entry and exit is possible in the long run, determine long-run equilibrium price, quantity sold by eachfirm, the market equilibrium quantity, and the number of firms there will be
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