Labor hours hired by the profit-maximizing monopolist

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Reference no: EM13735272

Suppose that one firm is the only employer of a certain labor service (i.e., the firm is a monopolist). Assume its MRPL is given by L = 11 - w and the labor supply is L = w.

(a) What is the wage paid and the number of labor hours hired by the profit-maximizing monopolist?

(b) What would be the wage and number of labor hours if the labor market were perfectly competitive?

(c) If a minimum wage law is passed that requires the monopolist to pay at least $5.50 per hour, how will this affect employment?

Reference no: EM13735272

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