Assume that a large firm buys all the farms in northern Florida and becomes the only employer of farm workers in the northern half of the state.

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2. Explain how the competitive labor market functioned before the buyout of the independent farms. How was the wage rate and quantity of workers employed in the market determined?
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4. What will happen to the wage rate and employment of farm workers after the industry becomes monopolistic? Illustrate your answer with an appropriate graph.
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6. What is MRC? Why is MRC a part of the monopsony graph and not a part of the perfectly competitive labor market graph?

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Before the buyout of the independent farms the competitive labor market in northern Florida would ha... View the full answer