Labour Demand with Monopsony in the Labour Market and Monopoly in the Output Market in the S Run. You are the manager of a business that operates as a Monopolist in the output market, and it is a Monopsonist in the local labour market. The production function of the business is given by: Q = 4L In the production function, Q is output, Lis the number of workers employed, As a Monopolist, the firm faces a market demand given by: P = 100 - Q As a Monopsonist the firm faces a supply of labour given by the expression: w = 8L a) Calculate the equilibrium number of units of labour employed in short run. b) Briefly discuss the advantages for a firm of being a Monopolist in the output Market and a Monopsonist in the Labour Market and try to find a real life example of a firm that can modeled as a Monopolist/ Monopsonist.

Labour Demand with Monopsony in the Labour Market and Monopoly in the Output Market in the S Run. You are the manager of a business that operates as a Monopolist in the output market, and it is a Monopsonist in the local labour market. The production function of the business is given by: Q = 4L In the production function, Q is output, Lis the number of workers employed, As a Monopolist, the firm faces a market demand given by: P = 100 - Q As a Monopsonist the firm faces a supply of labour given by the expression: w = 8L a) Calculate the equilibrium number of units of labour employed in short run. b) Briefly discuss the advantages for a firm of being a Monopolist in the output Market and a Monopsonist in the Labour Market and try to find a real life example of a firm that can modeled as a Monopolist/ Monopsonist.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Perfect Competition

It is the structure of the market that is said to exist when with many buyers and sellers exchanging similar commodities and its price is fixed by the market forces, demand, and supply, and a single firm cannot cause an impact over the price or market value of the homogenous product. This structure of the market is called perfect competition.

Question

Labour Demand with Monopsony in the Labour Market and Monopoly in the Output Market in the Short
Run.
You are the manager of a business that operates as a Monopolist in the output market, and it is a
Monopsonist in the local labour market. The production function of the business is given by: Q = 4L In
the production function, Q is output, Lis the number of workers employed, As a Monopolist, the firm
faces a market demand given by: P = 100 - Q
As a Monopsonist the firm faces a supply of labour given by the expression: w = 8L
a) Calculate the equilibrium number of units of labour employed in short run.
b) Briefly discuss the advantages for a firm of being a Monopolist in the output Market and a
Monopsonist in the Labour Market and try to find a real life example of a firm that can modeled as a
Monopolist/ Monopsonist.
c) What have you learn from doing or thinking about this problem?

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