2. [5 pts] Consider a small town with 20 retailers (stores selling food, clothing, books, etc.), each of which is small. Suppose their combined demand for labor is given by QP (P) = 50 - 2P, where P is the wage, measured in ($/hour) and the quantity is measured in thousands of hours of work per week. Suppose also that retail workers do not belong to a union and the total supply of full-time workers in the retail sector is Q5 (P) =P (measured again in 000's of hours per week). Wages in this town are only constrained by the federal minimum wage, which equals $7.25/hour In each of the labor market scenarios below, show in the graph and calculate the number of hours worked by retail workers each week and the hourly wage, worker surplus and employer surplus. Is there deadweight loss? Is there unemployment, or are there unfilled job listings? a) Initially the labor market in this town can be approximated as being perfectly competitive (stores compete to attract workers, and workers compete for jobs) b) Walmart puts all of these stores out of business and is the only retail employer left in town (labor market monopsony), but has the same marginal benefit from labor: MB(Q) = 25 -2. c) Walmart is still a monopsonist, but the minimum wage increases to $15/hour d) Walmart is still a monopsonist, but the minimum wage increases to $20/hour [optional] What if the government introduces a job guarantee program (google it), by which any person who wants to work will be offered employment in the public sector at a wage of $20/hour? e) Now suppose all retail workers are organized in an industry-wide labor union (which negotiates a collective contract on their behalf), while Walmart exits the market, allowing many small retail firms to return. Solve for the market outcome in this (unrealistic) monopoly scenario.