The Solo Coal Mine is the only employer in the small town of Way out there.The market supply of coal miners is Q^s = 0.02W - 200 and Q^d = 500 - 0.02W,where W is the annual wage of a coal miner and Q is the number of coal miners.What is the inverse demand function for coal miners?

Question

Quizplus · Accepted Answer

The inverse demand function for coal miners can be found by solving the market supply equations for W and then averaging the two resulting expressions. Given QS = 0.02W - 200 and QS = 500 - 0.02W, solving each for W gives W = 50Q + 10,000 and W = 25,000 - 50Q, respectively. Averaging these gives the inverse demand function W = 25,000 - 50Q.

The Solo Coal Mine Is the Only Employer in the Small