1) The employment of teaching assistants (TAs) by major universities can be characterized as a monopsony. Suppose the demand for TAs is W=30,000 -125n, where W is the wage (as an annual salary) and n is the number of TAs hired. The supply of TAs is given by W=1000+75n. a. If the university takes advantage of its monopsonist position, how many TAs will it hire? What wage will it pay? b. If, instead, the university faced an infinite supply of TAs at the annual wage level of $10.000, how many TAs would it hire?

1) The employment of teaching assistants (TAs) by major universities can be characterized as a monopsony. Suppose the demand for TAs is W=30,000 -125n, where W is the wage (as an annual salary) and n is the number of TAs hired. The supply of TAs is given by W=1000+75n. a. If the university takes advantage of its monopsonist position, how many TAs will it hire? What wage will it pay? b. If, instead, the university faced an infinite supply of TAs at the annual wage level of $10.000, how many TAs would it hire?

Microeconomic Theory

12th Edition

ISBN:9781337517942

Author:NICHOLSON

Publisher:NICHOLSON

Chapter16: Labor Markets

Section: Chapter Questions

Problem 16.5P

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