Suppose there are N I ‘inside workers’ who control the decisions of the firm. They share the firm’s profit equally among themselves. All other workers are hired at the competitive market wage rate....

Suppose there are N_I
‘inside workers’ who control the decisions of the firm. They share the firm’s profit equally among themselves. All other workers are hired at the competitive market wage rate. Thus we have a ‘discriminating LMF’. Analyse its employment choice and the effect on this of changes in the output price.