Assume labor market demand

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Assume labor market demand is given by: lD = 10 – w and labor market supply by: lS = w – 2. Suppose that a union has a monopoly in the supply of labor. Suppose also that the goal it has decided to pursue is to maximize the wage bill. In this case, what is the quantity of labor it will offer? (NOTE: Write your answer in number format, with 2 decimal places of precision level; do not write your answer as a fraction. HINTS: Sketch the Marshallian “cross” diagram of supply and demand to help you answer this question. Remember, this is a labor market, not an output market.) Show all steps.

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