If the market demand elasticity is constant at -3 and a monopolist's MPL = 1.2L-0.5, then the labor demand for the monopoly is A) 0.8PL-0.5. B) 0.4PL-0.5. C) 0.8PL-2. D) 0.4PL-2.
31) If the market
A) 0.8PL-0.5.
B) 0.4PL-0.5.
C) 0.8PL-2.
D) 0.4PL-2.
32) Suppose the market demand elasticity is constant at -2, and there are three identical firms in the oligopolistic market. A Cournot firm's MPL = 1.2L-0.5, then the labor demand for a Cournot firm is
A) PL-0.5.
B) 0.6PL-0.5.
C) 0.2PL-2.
D) PL-2.
33) If the labor market is competitive, a monopoly output market will result in
A) a lower wage than that of a competitive output market.
B) a higher wage than that of a competitive output market.
C) less labor hired than in a competitive output market.
D) more labor hired than in a competitive output market.
For the following, please answer "True" or "False" and explain why.
34) If the price of a competitive firm's output increases, the firm responds in the short run by demanding more labor.
35) If the competitive firm maximizes profit by selecting labor rather than output, it will earn greater economic profit.
36) The marginal revenue product of labor is usually downward sloping.
37) To derive the labor market demand curve, the labor demand curves for each firm in the output market of interest are summed.
38) If a firm has market power in the output market but buys labor in a competitive market, it will hire the same quantity of labor that a competitive firm will.
39) Because of market power, wages are higher under monopsony than under competitive conditions.
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