Workers for a firm have the following marginal productivity of labor: M P subscript L equals...

Workers for a firm have the following marginal productivity of labor: M P subscript L equals 50 minus L Suppose the firm sells its output for $2 per unit. The firm is a nondiscriminating monopsonist and faces the following labor supply curve: L equals W Determine the number of workers employed and the wage that the workers are paid.

Expert Solution

In order to maximize profit a non discriminating monopolist that amount of L where MRP = wage rate(W)

where MRP = Marginal Revenue Product = Price of Output * MPL = 2(50 - L)

So, MRP = W => 2(50 - L) = W => L = 50 - W/2 --------labor demand equation

It is given that, L = W--------------------Labor supply equation.

Equilibrium occus when Labor demand and Labor supply intersects

=> 50 - W/2 = W => W = 100/3 = 33.33

=> L = W = 33.33

Thus, Number of workers employed(L) = 33.33 and Wage that workers are paid(W) = 33.33

Rahul Sunny answered 2 years ago

Suppose that a firm finds that its low-productivity workers have a marginal revenue product of $21,000...

Suppose that a firm finds that its low-productivity workers have a marginal revenue product of $21,000 per year and that its high-productivity workers have a marginal revenue prod- uct of $35,000 per year. The cost of receiving a year’s worth of higher education is $4,000 for a low-productivity worker and $3,200 for a high-productivity worker. (This cost can be thought of as repayment on loans that have been incurred in the process of obtaining the education.) The firm plans to...

Suppose that the marginal product of labor is: MP = 100 – L, where L is the number of workers hired.

Suppose that the marginal product of labor is: MP = 100 – L, where L is the number of workers hired. You can sell the product in the marketplace for $50 per unit and the wage rate for labor is $100. How many workers should you hire?

Complete the table by calculating marginal productivity (MP) of labor and average productivity (AP) of labor....

Complete the table by calculating marginal productivity (MP) of labor and average productivity (AP) of labor. Then plot the total product, MP, and AP and explain the relationship between MP and AP. Why does MP first rise and then decline? Inputs of Labor Total Production Marginal Productivity Average Productivity 0 0 1 15 2 34 3 51 4 65 5 74 6 80 7 83 8 82

The value of the marginal product of labor for Panera is VMPL=20-(1/2)L. Panera hires L workers...

The value of the marginal product of labor for Panera is VMPL=20-(1/2)L. Panera hires L workers in a competitive labor market and only sells coffee, also in a competitive market. The price of coffee is $2. First, sketch Panera's demand for labor. Clearly label each axis. What market wage would induce Panera to hire only 4 workers? Suppose someone provided Panera with an infinite supply of free labor. Panera would not use an infinite number of workers; instead it would...

If marginal productivity of labor is falling, by hiring another unit of labor (all else held...

If marginal productivity of labor is falling, by hiring another unit of labor (all else held the same) we know that: A Average productivity must be falling. B Marginal cost must be falling. C Marginal cost must be rising. D Average cost must be falling.

The following are correct statements about the Marginal Productivity of Labor (MPL), EXCEPT: Question 12 options:...

The following are correct statements about the Marginal Productivity of Labor (MPL), EXCEPT: Question 12 options: It is the increase in production per worker generated by technological innovations Is the increase in total production coming from an increase in one unit of labor Is increasing at early stages of production because the beneficial effect of division of labor in early stages of production. It will eventually decline because additional workers will eventually over-saturate the production process. The following are correct...

13 Refer to the following table: Number of workers Output Marginal Product of Labor Value of...

13 Refer to the following table: Number of workers Output Marginal Product of Labor Value of Marginal Product of Labor Wage Marginal Profit 0 0 -- -- $300 -- 1 300 300 $600 $300 $300 2 500 200 AA $300 $100 3 600 100 $200 $300 BB 4 650 CC DD $300 - $200 13.1. Problem Set #7 - Part II - 13.1 (A) What is the value for the cell labeled AA? A. $300 B. $600 C. $400 D. $500 E. $200 13.2. Problem...

Suppose we have a competitive labor market. What is the marginal benefit to the firm...

Suppose we have a competitive labor market. What is the marginal benefit to the firm of hiring another worker? Explain why. What is the marginal cost to the firm of hiring another worker? How does the firm decide how many workers to hire in the short run? In the long run, capital is no longer fixed Explain how this changes the labor decision for the firm. What is the main difference between labor demand in the short run and...

1. Firm X is producing the quantity of output at which marginal revenue equals marginal cost....

1. Firm X is producing the quantity of output at which marginal revenue equals marginal cost. It is earning A. a positive economic profit. B. an economic loss. C. a normal profit. D,There is not enough information to answer the question. 2. A perfectly competitive firm will always maximize short-run profits by producing the level of output where the average total cost is minimized. A.True B.False

A competitive firm maximizes profit at the point where marginal revenue equals marginal cost; a monopolist...

A competitive firm maximizes profit at the point where marginal revenue equals marginal cost; a monopolist maximizes profit at the point where marginal revenue exceeds marginal cost. true or false Price discrimination is a rational strategy for a profit-maximizing monopolist when there is no opportunity for customers to engage in arbitrage across market segmentations true or false When regulating a monopoly with average cost pricing, the monopoly is able to enjoy a zero economic profit and the deadweight loss of...

Question