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Derive the equilibrium (labour market tightness, j and the size of the labour force, Q) in...
What is the impact of the subsidy (s) on labour supply (Q) and labour market tightness (j), the real wage (w) and the unemployment rate (u)?
when a firm is given a subsidy what happens to labour market tightness and labour supply? and why?
Q.1 Consider the DMP model. Low unemployment is a commonly pursued goal of governments. A subsidy, s, given to firms to encourage more hiring is a policy option that can be implemented with the intended goal of increasing employment and reducing the unemployment rate. ( a) What is the firm's surplus, consumer/worker surplus and total surplus with the introduction of a subsidy? b) Using Nash Bargaining what is the real wage solution? (c) Determine the equation that determines the supply...
Labour Demand with Monopsony in the Labour Market and Monopoly in the Output Market. 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 = S2L In the production function, Q is output, L is the number of workers employed, As a Monopolist, the firm faces a market demand given by: P= Q-BQ As...
the labour market model a. Take a look at figure 9.12, the labour market model. Describe position B. Explain why B is not a Nash equilibrium. What would happen? b. In a. you’ll describe an adaptation process. However, that might not take place. For what reasons? Labour supply Average product of labour Real wage Price-setting curve Equilibrium unemployment Demand-deficient or cyclical unemployment, at B Wage-setting curve Total involuntary unemployment, at B Employment, N The Nash equilibrium At point B, total...
1. Labour Market. Draw a diagram of the labour market where there above the equilibrium level. Use I to denote the amount of labour to denote the amount of labour hired. bour market where the real wage is stuck note the amount of labour willing to work and L1 Now suppose there is an increase in technology that raises the demand the new demand curve and explain what happens to the and curve and explain what happens to the number...
1. Q = 4000 – 2P Q= - 150 +P a. Derive equilibrium price and quantity Derive point price elasticity of demand at equilibrium
Q.1 Consider the DMP model. Low unemployment is a commonly pursued goal of governments. A subsidy, s, given to firms to encourage more hiring is a policy option that can be implemented with the intended goal of increasing employment and reducing the unemployment rate. (16 marks) a) What is the firm's surplus, consumer/worker surplus and total surplus with the introduction of a subsidy? (2 marks) b) Using Nash Bargaining what is the real wage solution? (2 marks) c) Determine the...
A market is organized as a duopoly, and the market demand function is Q = 1000 - 1000P. Each of the two firms has a constant marginal cost equal to $0.28 per unit of output. a) Derive the best-response function for each firm. b) Calculate the equilibrium quantity supplied in the market and the equilibrium price. c) Calculate the profit level for each firm.
3. Coumot Competibion (26 points) Consider a Cournot model. The market demand is p-130-q-q Firm l's marginal cost is 10, and fim 2's marginal cost is also 10. There are no fixed costs. A. (10points) Derive the best response function for each firm B. (6 points) Find the Nash Equilibrium. T. (5 points) Find the equilibrium market price and each firm's equilibrium profit. D. (5 points) Find the consumer surplus at the market equilibrium.