Discuss the favourable impact on resource allocation

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-Discuss the favourable impact on resource allocation of setting a minimum wage at the intersection of the S and VMP schedules.

-In what sense are resources allocated more efficiently at that point than at the monopsonist's equilibrium?

-If the monopsonist followed a policy of perfect wage differentiation in the absence of the minimum wage, what would be the implications for resource allocation?

-Compare the income distribution consequences of the two alternatives of minimum wages and perfect wage differentiation.

Reference no: EM132908489

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