Please complete my microeconomics worksheet

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Answered Same DayMay 28, 2020

Answer To: Please complete my microeconomics worksheet

Deepika answered on May 28 2020
142 Votes
Ans 1. The equilibrium quantity of labour the firm will employ (qe) = 24 people/year
Because the em
ployer is a monopsonist and equilibrium is established where the marginal factor cost of labour (MFCL) is equal to its marginal revenue product.
At this equilibrium quantity of labour,
(a) MRPlabour = $1.2m/person/year
(b) MFClabour = $1.2m/person/year
Ans 2. The equilibrium wage paid by the firm (we) = $0.8m/person/yr (Determined by dropping a vertical line from the intersection of MRP curve and MFC curve to the supply curve)
Because
wage rate under monopsony is smaller than the value of marginal...
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