What is the wage rate and employment level under monopsony

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Reference no: EM131376594

Consider a monopsonist in the labor market. Let the labor supply be given by L = 4w, where L is the employment level, and w is the wage rate. Suppose that the monopsonist has the production function F(L) = √ L. The monopsonist can sell its output at a price of one.

(a) What is the marginal value and marginal expenditure of the monopsonist as a function of the employment level?

(b) What is the wage rate and employment level under monopsony?

(d) What minimum wage rate would result in an efficient employment level?

Reference no: EM131376594

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