A pizza shop's marginal product of labor, measured as the number of pizzas delivered per week, is MPl = 55 - 5L, where L is the number of workers. The current average price of a pizza in this highly competitive market is $10. The shop, a monopsonist, faces labor supply of W = 100 + 40l, where W is the wage per week and L is the number of workers.
a. How many workers will the pizza shop hire when the price of pizza is $10?
b. An influx of college students coming back from vacation raises the market price of a pizza to $15. How many workers will the pizza shop hire when the price of pizza is $15?
Correct Answer:
Verified
View Answer
Unlock this answer now
Get Access to more Verified Answers free of charge
Q46: If the labor supply curve faced by
Q57: Use the following to answer questions 43-44:
Figure
Q59: Use the following to answer questions 40-42:
Figure
Q60: Use the following to answer question:
Table 13.5
Q63: At many colleges and universities, adjunct (part-time)
Q64: Explain how the following would affect the
Q65: Use the following to answer question:
Figure 13.9
Q67: Use the following to answer question:
Table 13.3
Q82: Explain how a union is similar to
Q87: Suppose the demand faced by a labor
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents