Economics 20th Edition by Campbell McConnell ,Stanley Brue ,Sean Flynn

Exercise 3

Assume a firm is a monopsonist that can hire its first worker for $6 but must increase the wage rate by $3 to attract such successive worker (so that the second worker must be paid $9, the third $12, and so on).
a. Draw the firm's labor supply and marginal resource cost curves. Are the curves the same or different? If they are different, which one is higher?
b. On the same graph, pthe labor demand data of question 2 in Chapter 12. What are the equilibrium wage rate and level of emp|
c. Compare these answers with those you found in problem 2. By how much does the monoposonist reduce wages bethe competitive wage? By how much does the monopsonist reduce empbethe competitive level?