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Q. Units of Labor Marginal RevenueProduct0 na1 $302 $243 $184 $155 $126 $10
Assume a firm is a monopsonist that can hire its first worker for $6 but must increase the wage rate by $3 to attract each successive worker (so that the second worker must be paid $9, the third $12, and so on). The marginal revenue product of labor is given in the table above.
Illustrate what will be the competitive equilibrium wage rate?
Illustrate what will be the competitive equilibrium level of employment?
Illustrate what will be the wage rate under monopsonistic conditions?
Illustrate what will be level of employment under monopsonistic conditions?
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