The supply of labour to a monopsonistic firm is w = 10 + z, where w is the wage rate and z is quantity of labour. The firm's MRP = 70 - z. The firm employs only labour. The wage rate which maximizes the firm's profit is:

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To maximize profit, the firm sets MRP equal to the marginal cost of labor (MCL). The supply curve is w = 10 + z, so the total cost is w*z = (10 + z)z. The derivative of total cost with respect to z gives MCL = 10 + 2z. Setting MRP = MCL: 70 - z = 10 + 2z, solving gives z = 20. Substituting z = 20 into the supply equation gives w = 10 + 20 = 30.

The Supply of Labour to a Monopsonistic Firm Is W