What is the deadweight loss arising from monopsony

Reference no: EM131248346

National Hospital is the only employer of nurses in the country of Castoria, and it acts as a profit maximizing monopsonist in the market for nursing labor. The marginal revenue product for nurses is w =50 - 2N, where w is the wage rate and N is the number of nurses employed (measured in hundreds of nurses). Nursing services are provided according to the supply schedule w = 14 + 2N.

a) How many nurses does National Hospital employ, and what wage will National pay its nurses?

b) What is the deadweight loss arising from monopsony?

Reference no: EM131248346

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