a) Maintain the assumption that firms can not price discriminate in the input market and fill in the firm's Marginal Cost (MC) table. b) How many workers will the monoposonist hire and what would the wage be? How many workers would have been hired and at what wage if this were a perfectly competitive market? c) Suppose now the province introduces a new minimum wage policy which sets the minimum wage at $6. Fill in the monopsonist's supply and marginal cost tables with the minimum wage. d) What will happen to the number of workers hired with the introduction of this minimum wage?
a) Maintain the assumption that firms can not price discriminate in the input market and fill in the firm's Marginal Cost (MC) table. b) How many workers will the monoposonist hire and what would the wage be? How many workers would have been hired and at what wage if this were a perfectly competitive market? c) Suppose now the province introduces a new minimum wage policy which sets the minimum wage at $6. Fill in the monopsonist's supply and marginal cost tables with the minimum wage. d) What will happen to the number of workers hired with the introduction of this minimum wage?
Chapter16: Labor Markets
Section: Chapter Questions
Problem 16.5P
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Question
Transcribed Image Text:Suppose that the supply and marginal revenue product of labour curves faced by a monopsonist
are as follows:
Supply with
Min Wage
MC
Units of Labour
(N)
Supply
MRPN
MC with
Min Wage
1
5.00
8.00
2
5.20
7.50
5.45
7.00
5.70
6.45
5
6.00
6.05
6.
6.30
6.65
5.50
7
4.90
7.00
4.00
a) Maintain the assumption that firms can not price discriminate in the input market and fill in the
firm's Marginal Cost (MC) table.
b) How many workers will the monoposonist hire and what would the wage be? How many
workers would have been hired and at what wage if this were a perfectly competitive market?
c) Suppose now the province introduces a new minimum wage policy which sets the minimum
wage at $6. Fill in the monopsonist's supply and marginal cost tables with the minimum wage.
d) What will happen to the number of workers hired with the introduction of this minimum wage?
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