In the above drawing, W 2 = $25/hour, W 1 = $20/hour, and L 2 = 100,000

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In the above drawing, W₂ = $25/hour, W₁ = $20/hour, and L₂ = 100,000 and L₁ = 80,000.

a. If the market was a monopsony what would be the wage rate, W1 or W2? Explain why? 3 Marks

b. If this labour market was a competitive labour market how many workers would be employed? L1 or L2? Explain why?

Related Book For answer-question

Financial and Managerial Accounting

ISBN: 978-1285078571

12th edition

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

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Posted Date: Nov 22, 2022 05:57 AM

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In the above drawing, W 2 = $25/hour, W 1 = $20/hour, and L 2 = 100,000

Question:

FIGURE 10.4 Wage Rate and Employment Determination Under Monopsony Wage rate W2 W₁ MLC S K L₁ {2 D(MRP) Number of workers FIGURE 10.4 Wage Rate and Employment Determination Under Monopsony Wage rate W2 W₁ MLC S K L₁ {2 D(MRP) Number of workers

Expert Answer:

Answer Q1wage rate W1 Explanation The wage rate W1 would be higher ... View the full answer

Financial and Managerial Accounting

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