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
L* = 25.6
W= 2*L = 51.2
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...
usion (24 points) Two firms are playing a repeated Bertrand game infinitely, each with the same marginal cost 100. The market demand function is P-400-Q. The firm who charges the lower price wins the whole market. When both firms charge the same price, each gets 1/2 of the total market. I. Coll A. (6 points) What price will they choose in the stage (only one period) Nash equilibrium? What price will they choose if in the stage game (only one...