How will that wage compare to the mrpl

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Suppose that the supply curve for the labor to a firm is given by:

L=100w

And the marginal expense of labor curve is given by:

MEL= L / 50

Where w is the market wage. Suppose also that the firms demand for labor (marginal revenue product) curve is given by:

L= 1,000- 100MRP1

A. If the firm acts as a monoponist, how many workers will it hire in order to maximize profits? What wage will it pay? How will that wage compare to the MRPl at the employment level?

B. Assume now that the firm must have its workers in a perfectly competitive labor market, nut it still acts as a monopoly when selling its output. How many workers will the firm hire now? What wage will it pay?

Reference no: EM13203659

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