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The employees at Warren Manufacturing Company are unionized. As minimum requirements, the union members insist on keeping a work force of at least 300 workers, and accepting an hourly wage rate of no less than $8. Beyond those minimum requirements, however, they are considering some different economic goals. Calculated on an hourly basis, the employees' marginal revenue product schedule is:
Employees MRP
100 $20
200 18
300 16
400 14
450 13
500 12
550 11
600 10
650 9
700 8
800 6
900 4
a) If the union attempts to maximize the wage rate of its employees, subject to the above constraints, what wage rate and employment level can it expect to achieve? b) If the union attempts to maximize the employment of its members at Warren, what wage rate and employment level can it expect to achieve?
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