1) ABC (american bread company) is a competitor in the product market but a monopolist in...
1) ABC (american bread company) is a competitor in the product market but a monopolist in the labor market. ABC's production function is characterized as Q=30L-0.5L2. It is also known that the market demand and supply of bread was Q=1000-5P and Q=-20+250P respectevily. The market supply of labor is W=2L answer the following
A. derive the unconditional demand for labor for ABC. show all computations
b. suppose ABC does not exploit its monopsony powers ( acts as a competitor in the labor market) compute the equilibrium W and L .
c. suppose ABC does exploit its monopsony status what is the equilibrium W and L now. in addition compute economic rent and employer surplus
d. if the government set a minimum wage (full coverage) at $35 what is the employment ES(employer surplus) ER (economic rent) now. compare to when abc exploits its monopsony power who gains, who loses? what is the net gaim
Homework Answers
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1) ABC (american bread company) is a competitor in the product
market but a monopolist in...
1) ABC (american bread company) is a competitor in the product market but a monopolist in the labor market. ABC's production function is characterized as Q=30L-0.5L2. It is also known that the mar...
1) ABC (american bread company) is a competitor in the product market but a monopolist in the labor market. ABC's production function is characterized as Q=30L-0.5L2. It is also known that the market demand and supply of bread was Q=1000-5P and Q=-20+250P respectevily. The market supply of labor is W=2L answer the following A. derive the unconditional demand for labor for ABC. show all computations b. suppose ABC does not exploit its monopsony powers ( acts as a competitor in...
I. Suppose a monopolist has C(Q)20 + 2Q, and the demand curve it faces is Q- 200p-2. What w be the price, quantity, and prof for this firm? Calculate the deadweight loss resulting from the monopoly i...
I. Suppose a monopolist has C(Q)20 + 2Q, and the demand curve it faces is Q- 200p-2. What w be the price, quantity, and prof for this firm? Calculate the deadweight loss resulting from the monopoly in this market. What are producer surplus consumer surplus, and total surplus under monopoly and at the efficient level? 2. Which of the following are na tural monopolies? Explain your answers a. Firms cach have C(q)-10+q b. Firms cach have C(q) 1000000 +1000000q c....
Problem #4: Own-price elasticity Suppose the market labor demand curve is given by LD 20- (1/2)W...
Problem #4: Own-price elasticity Suppose the market labor demand curve is given by LD 20- (1/2)W and the market labor supply curve is given by LS-2W 1. Graph the labor demand curve and the labor supply curve on the same graph (with L on the horizontal axis and W on the vertical axis, as we have done in class). 2. Determine the equilibrium employment (L") and wage (W") in this market. Now suppose the government implements a minimum wage (WM)...
Problem #4: Own-price elasticity Suppose the market labor demand curve is given by LD-20-(1/2)W and the...
Problem #4: Own-price elasticity Suppose the market labor demand curve is given by LD-20-(1/2)W and the market labor supply curve is given by LS-2 1. Graph the labor demand curve and the labor supply curve on the same graph (with L on the horizontal axis and W on the vertical axis, as we have done in class) 2 Determine the equilibrium employment (L') and wage (W) in this market 3. Now suppose the government implements a minimum wage (WM) of...
Problem #4: Own-price elasticity Suppose the market labor demand curve is given by LD = 20-(1/2,W...
Problem #4: Own-price elasticity Suppose the market labor demand curve is given by LD = 20-(1/2,W and the market labor supply curve is given by LS 2 1. Graph the labor demand curve and the labor supply curve on the same graph (with L on the horizontal axis and W on the vertical axis, as we have done in class) 2. Determine the equilibrium employment (L and wage (W in this market 3. Now suppose the government implements a minimum...
Number 6 please tax a. What is b. What is 102 Part 1 Basic Concepts c....
Number 6 please
tax a. What is b. What is 102 Part 1 Basic Concepts c. Find the value of producer surplus received by dive shops. (Hint: It may help to draw a sold beef c. How much graph.) vices increases, and that the new demand is given by Q-7,000-20P. Calculate the impact of this change in demand on the values you calcu- gain? d. What is the l e. The president d. Suppose that the demand for scuba diving...
Question 1 Suppose that the market demand curve and the market supply curve are described, respectively,...
Question 1 Suppose that the market demand curve and the market supply curve are described, respectively, by D(p) 240 3p and S(p) 5p. Compute the equilibrium price-quantity pair (p*,q*) (A) (20, 100) (B) (20, 180) (C) (30, 150) (D) (35, 135) (E) (40,200) Question 2 The setup is the same as in Question 1, except that the government now levies a quantity tax in the amount of $8 per unit of the good. Letting pf denote the price buyers pay...
Q13 In a simple labor market model with perfect competition. 1. Draw a supply and demand,...
Q13 In a simple labor market model with perfect competition. 1. Draw a supply and demand, and label the axis appropriately. What is a the price in this setting? What is the quantity? Who are the sellers? Who are the buyers? 2. The government wants to increase revenue, and decides to implement a tax on the labor market. Draw the effect of two taxes: one payed by workers and another payed by firms. Compare them. 3. Explain what are the...
equilibrium wage? Question 6 1 points Save Answer Consider the following labor market Labor demand: Lap-...
equilibrium wage?
Question 6 1 points Save Answer Consider the following labor market Labor demand: Lap- w Labor supply: LS as 2w where w is the wage, Lis the number of workers, ap and as are constants Now suppose that business owners predict low sales next year so they reduce hiring and as a result, ap-70,0000 and as10,000. But in this scenario wages are totally rigid and cannot adjust this year from its orig level (i.e. when ap=100,000 and as10,000):...
11)A supply curve that is horizontally sloped is an accurate representation of the law of supply...
11)A supply curve that is horizontally sloped is an accurate representation of the law of supply given ceteris paribus when only price changes for a good is a: (a)False statement (b)True statement (c)More information needed to respond (d)All of the above (12)Positive economic analysis deals with_________________________ and normative economic analysis deals with_____________________ (a)What should be, what is (b)What is, what ought to be (c)Fiction, fact (d)Positive things, negative things (13)If given ceteris paribus there is a positive correlation between annual...
I. Suppose a monopolist has C(Q)20 + 2Q, and the demand curve it faces is Q- 200p-2. What w be the price, quantity, and prof for this firm? Calculate the deadweight loss resulting from the monopoly in this market. What are producer surplus consumer surplus, and total surplus under monopoly and at the efficient level? 2. Which of the following are na tural monopolies? Explain your answers a. Firms cach have C(q)-10+q b. Firms cach have C(q) 1000000 +1000000q c....
Problem #4: Own-price elasticity Suppose the market labor demand curve is given by LD 20- (1/2)W and the market labor supply curve is given by LS-2W 1. Graph the labor demand curve and the labor supply curve on the same graph (with L on the horizontal axis and W on the vertical axis, as we have done in class). 2. Determine the equilibrium employment (L") and wage (W") in this market. Now suppose the government implements a minimum wage (WM)...
Problem #4: Own-price elasticity Suppose the market labor demand curve is given by LD-20-(1/2)W and the market labor supply curve is given by LS-2 1. Graph the labor demand curve and the labor supply curve on the same graph (with L on the horizontal axis and W on the vertical axis, as we have done in class) 2 Determine the equilibrium employment (L') and wage (W) in this market 3. Now suppose the government implements a minimum wage (WM) of...
Problem #4: Own-price elasticity Suppose the market labor demand curve is given by LD = 20-(1/2,W and the market labor supply curve is given by LS 2 1. Graph the labor demand curve and the labor supply curve on the same graph (with L on the horizontal axis and W on the vertical axis, as we have done in class) 2. Determine the equilibrium employment (L and wage (W in this market 3. Now suppose the government implements a minimum...
Number 6 please
tax a. What is b. What is 102 Part 1 Basic Concepts c. Find the value of producer surplus received by dive shops. (Hint: It may help to draw a sold beef c. How much graph.) vices increases, and that the new demand is given by Q-7,000-20P. Calculate the impact of this change in demand on the values you calcu- gain? d. What is the l e. The president d. Suppose that the demand for scuba diving...
Question 1 Suppose that the market demand curve and the market supply curve are described, respectively, by D(p) 240 3p and S(p) 5p. Compute the equilibrium price-quantity pair (p*,q*) (A) (20, 100) (B) (20, 180) (C) (30, 150) (D) (35, 135) (E) (40,200) Question 2 The setup is the same as in Question 1, except that the government now levies a quantity tax in the amount of $8 per unit of the good. Letting pf denote the price buyers pay...
Q13 In a simple labor market model with perfect competition. 1. Draw a supply and demand, and label the axis appropriately. What is a the price in this setting? What is the quantity? Who are the sellers? Who are the buyers? 2. The government wants to increase revenue, and decides to implement a tax on the labor market. Draw the effect of two taxes: one payed by workers and another payed by firms. Compare them. 3. Explain what are the...
equilibrium wage?
Question 6 1 points Save Answer Consider the following labor market Labor demand: Lap- w Labor supply: LS as 2w where w is the wage, Lis the number of workers, ap and as are constants Now suppose that business owners predict low sales next year so they reduce hiring and as a result, ap-70,0000 and as10,000. But in this scenario wages are totally rigid and cannot adjust this year from its orig level (i.e. when ap=100,000 and as10,000):...
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