Suppose the demand faced by a labor monopsony is W = 40,000 - 100l, where W is the annual wage and L is the number of workers hired. The labor supply is given by W = 10,000 + 100l.
a. Derive the marginal expenditure equation.
b. Determine the wage the monopsonist would pay and how many workers it would hire.

Question

Quizplus · Accepted Answer

The Answer of Suppose the demand faced by a labor monopsony is W = 40,000 - 100l, where W is the annual wage and L is the number of workers hired. The labor supply is given by W = 10,000 + 100l.
a. Derive the marginal expenditure equation.
b. Determine the wage the monopsonist would pay and how many workers it would hire.

Suppose the Demand Faced by a Labor Monopsony Is W