Consider a firm that is a monopolist in its output market and a monopsonist in the market for labor, the only input, The elasticity of demand for a firms good is -2 and the elasticity of supply for labor 4. Then, the revenue marginal product of labour exceeds the wage paid by this firm by (insert a number) percent. At the monopoly-monopsonist outcome, the consumers willingness-to-pay for additional output exceeds how much you need to pay a worker for the extra time to produce the extra output by (insert a number) percent.

Consider a firm that is a monopolist in its output market and a monopsonist in the market for labor, the only input, The elasticity of demand for a firms good is -2 and the elasticity of supply for labor 4. Then, the revenue marginal product of labour exceeds the wage paid by this firm by (insert a number) percent. At the monopoly-monopsonist outcome, the consumers willingness-to-pay for additional output exceeds how much you need to pay a worker for the extra time to produce the extra output by (insert a number) percent.

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter14: Monopoly

Section: Chapter Questions

Problem 14.2P

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