How much labour would the nondiscriminating monopsonist hire

Assignment Help Microeconomics

Reference no: EM133440735

Assignment:

A monopsonist's demand for labour can be written as VMPE = 80- 0.01ED., where VMPE denotes the value of the marginal product of labour. Labour is supplied to the firm according to w = 20+ 0.02ES, where w denotes the wage.

(a) If the monopsonist were perfectly discriminating, how much labour would the monopsonist hire? How much producer surplus would a perfectly discriminating monopsonist receive?

(b) Assume the monopsonist is nondiscriminating. How much labour does the nondiscriminating monopsonist hire and at what wage? How much producer surplus does the nondiscriminating monopsonist receive?

(c) How much labour would the nondiscriminating monopsonist hire and at what wage if the government imposed a minimum wage of $50? Would total surplus increase or decrease? By how much?

(d) Provide a graphical representation for parts (a) to (c). Make sure to include all relevant labels and values.

Reference no: EM133440735

Questions Cloud

National institute of standards and technology : The National Institute of Standards and Technology (NIST) publishes a Summary of Ethics Rules.

Computer crime have been reported in media : Many examples of computer crime have been reported in the media. The extent of computer crime is such that incidents seem to happen daily.

Positive or negative that systems can seem intelligent : Is it generally a positive or a negative that systems can seem "intelligent?"

Implemented to prevent breach : What security measures should have been implemented to prevent this breach?

How much labour would the nondiscriminating monopsonist hire : How much labour would the nondiscriminating monopsonist hire and at what wage if the government imposed a minimum wage of $50?

What is the company expected payoff : If the company does not interview the applicant, would they hire the applicant? What is the company's expected payoff if they do not interview the applicant?

Discuss a history of the global economy : Based on Module "East Asia and Eastern South Asia (Japan)" (pages 167-187), of the book "A History of the Global Economy" by Jeorg Baten.

What do they mean by a fail distribution of income : What do they mean by a "fail" distribution of income? Why are these two assumptions problematic?

What direction will the supply curve or demand curve shift : If incomes increase, what direction will the supply curve or demand curve shift? How do the equilibrium price and equilibrium quantity change?

User Account

All Pages