A monopsonic fast food chain exhibits a demand for labor

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A monopsonic Fast Food Chain exhibits a demand for labor given by w=210-3L, where w denotes the wage and L the quantity of labor hired. Workers' labor supply is given by w=2L+7.

If the government imposed a minimum wage of w=70, what would be the resulting quantity of labor employed, the wage, and the welfare loss. Also, calculate the change in welfare compared to the free market outcome (i.e., in the absence of minimum wages). Is this a welfare gain or a loss?

Reference no: EM13378962

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