Demand is given as Qd = 420 - 8W, where Qd is the quantity demanded (in full-time equivalents) and W is the hourly wage rate. Supply is given as Qs = -1,000 + 40W, where Qs is the quantity supplied.

the marginal resource cost is: MRC = a + 2bQs

6. With a monopsony, how many nurses are hired?

7. What is the wage rate? (hint: use the inverse supply curve - not the MRC or demand curve - for this purpose)

8. If the hospital could hire as many nurses as it wanted with the wage rate you found in (7), how many nurses would be hired? (hint: use the demand curve to answer this - plug in the wage from (7))

9. What is the 'shortage' of nurses? (This is the difference between your answer to (8) and your answer to (6)).