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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 monopson- ist 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?
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