Question 3 . Bill Gates is the monopoly in the computer market and the sole employer of IT specialists in the labor market. The demand curve for computer is given by P=120-2Q, where Q is the number of computer installed per week. The short-run production function for computer is given by Q=5L, where L is the number of full-time IT specialists employed per week. The supply curve for IT specialists is given by W=100+12.5L where W is the weekly wage for IT specialist. How many IT specialists will Bill Gates hire, and what wage will Bill Gates pay?

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The theory of absolute advantage was given by Adam Smith in the year 1776.