Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Question
Chapter 29, Problem 11E
To determine
To explain:
The difference between the perspectives for Company Wand whether Company W is a monopsonist or not.
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Students have asked these similar questions
How should a monopsonist decide how much of a product to buy? Will it buy more or less than a competitive buyer? Explain.
On a clearly labeled graph, show what happens to wages paid and employment if the government imposes a payroll tax on a monopsonist? Should the change in wages paid and employment be larger for a monopsonistic labor market or a perfectly competitive one? Explain your answer.
Don't copy paste
If the sole employer in a market is a monopsonist, the equilibrium number of workers hired will be ___ and the equilibrium wage will be ___ than they would be in a perfectly competitive market.
a.Higher; higher
b.Lower; higher
c.Higher; lower
d.Lower; lower
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Similar questions
- Table 14.13 shows information from the supply curve for labor for a monopsonist, that is, the wage rate required at each level of employment. What is the monopsonists marginal cost of labor at each level of employment? If each unit of labors marginal revenue product is 13, what is the firms profit maximizing level of employment and wage?arrow_forwardIf the sole employer in a market is a monopsonist, the equilibrium number of workers hired will be ___ and the equilibrium wage will be ___ than they would be in a perfectly competitive market. a.Higher; higher b.Lower; higher c.Higher; lowerarrow_forwardQuestion 16 : What is meant by a " price taker " ? Question 16 options : a ) A monopsonist consumer can set the market price b ) No consumer or producer can determine the market price c ) Consumers have perfect information d ) Producers have more information than consumersearrow_forward
- Firm Alpha is a monopsonist in the labor market. The firm’s marginal value of labor is MVL = 105 - 3L. The labor supply is LS = 0.5w. The monopsonist uses its market power to maximize its own profit. The monopsonist hires L= workers and pays a wage w=. The deadweight loss in this market is DWL=.arrow_forwardCan a monopsony exercise monopsony power if the supply curve it faces is horizontal? Why or why not?arrow_forwardThe demand for labor for a firm operating in a perfectly competitive output market equals ____. The demand for labor for a firm with market power in the output market equals ______. Would you expect the presence of labor unions to lead to higher or lower pay for worker-members? Would you expect a higher or lower quantity of workers hired by those employers? Explain briefly.arrow_forward
- 1. How is the wage rate and level of employment determined if the labor market was controlled by a monopsonist. Discuss and explain in detail with the help of diagrams.arrow_forward1. Use the graph to answer the question that follows. If the price is set to P1, what area represents the producer surplus in the graph shown above? D B + C + D C + D + F B + C + D + G B + C + D + E + F 2. The graph below represents the labor supply curve of a monopsonistic firm. What is the quantity of labor and the wage that will maximize the firm's profits? Firm's profits are maximized at quantity = Q1 and wage = W4 Firm's profits are maximized at quantity = Q2 and wage = W3 Firm's profits are maximized at quantity = Q2 and wage = W5 Firm's profits are maximized at quantity = Q3 and wage = W1 Firm's profits are maximized at quantity = Q1 and wage = W2arrow_forward
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