Question

Select the File Copy commands in Google to make a copy of the graph in your Google Drive Account, then follow the below instructions to complete the graph

 1. in the right hand diagram represent a monopsony equilibrium outcome.

 2. in the left hand diagram represent a bilateral monopoly outcome

QUESTION 4 

In perfect competition the equilibrium wage rate is 

$800 $300 $500 $0 

QUESTION 5 

In the bilateral monopoly the negotiation range is $_ to $_ 

$700, $300 

$600, $500 

$700, $600 

$800, $200

Answer 1

Q4) option C) 500

in perfect competition, at eqm

Demand cuts supply curve

So at eqm, wage = 500

Q5) option A) 700 to 300

in bilateral monopoly,

A single monopsonist & single monopolist exists

Monopsony wages ( lower limit ),

where ME = MRPL(demand Curve )

So at L*= 3, wages = 300 ( from supply curve )

In monopoly

at eqm , MR cuts supply

so wages = =700( from MRPL Curve )