Firm Alpha is a monopsonist in the labor market. The firm’s marginal value of labor is MVL = 105 - 3L. The labor supply is LS = 0.5w. The monopsonist uses its market power to maximize its own profit. The monopsonist hires L= workers and pays a wage w=. The deadweight loss in this market is DWL=.

Firm is a monopsonist and uses its market power to maximize its own profit. Labor Demand = Marginal…

Answered: Firm Alpha is a monopsonist in the…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Firm Alpha is a monopsonist in the labor market.

The firm’s marginal value of labor is MV_L = 105 - 3L.

The labor supply is L^S = 0.5w.

The monopsonist uses its market power to maximize its own profit. The monopsonist hires L= workers and pays a wage w=. The deadweight loss in this market is DWL=.

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