-(Exhibit: Minimum Wage and Monopsony) If a $30 minimum wage is imposed, the monopsony firm in the exhibit would maximize profits by hiring _______ units of labor per period.

Question

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In a monopsony, the firm maximizes profits where marginal cost of labor equals marginal revenue product. With a minimum wage of $30, the firm will hire labor where the supply curve (now horizontal at $30) intersects the marginal revenue product curve, which is at L₂.

-(Exhibit: Minimum Wage and Monopsony) If a $30 Minimum Wage