Question: Acme is the sole supplier of security systems in the
Acme is the sole supplier of security systems in the product market and the sole employer of locksmiths in the labor market. The demand curve for security systems is given by P = 100 - Q, where Q is the number of systems installed per week. The short- run production function for security systems is given by Q = 4L, where L is the number of full- time locksmiths employed per week. The supply curve for lock-smiths is given by W = 40 + 2L, where W is the weekly wage for each locksmith. How many locksmiths will Acme hire, and what wage will it pay?
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