PLEASE HELP. This is all the information that is provided 2 Labor Demand with Monopoly Product Markets
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2 Labor Demand with Monopoly Product Markets 1. Augment the competitive market firm's optimization problem to allow the price of the product to decrease with the quantity of output produced, so p = p(q) and p(q) < 0. Write the firm's profit function and optimization problem. 2. Derive the condition: MR = p(1+ where n is the elasticity of product demand the firm faces in the labor market. 3. Interpret the condition. Explain how it nests the perfectly competitive case. 4. How does the firm's production differ from the competitive case? How does this impact its demand for labor? Consider the production function and product demand functions: q = f(L) = L q(p) = 100 - 2p 5. How much will the firm produce in a competitive market? How much will the firm produce if it is a monopoly? 2 Labor Demand with Monopoly Product Markets 1. Augment the competitive market firm's optimization problem to allow the price of the product to decrease with the quantity of output produced, so p = p(q) and p(q) < 0. Write the firm's profit function and optimization problem. 2. Derive the condition: MR = p(1+ where n is the elasticity of product demand the firm faces in the labor market. 3. Interpret the condition. Explain how it nests the perfectly competitive case. 4. How does the firm's production differ from the competitive case? How does this impact its demand for labor? Consider the production function and product demand functions: q = f(L) = L q(p) = 100 - 2p 5. How much will the firm produce in a competitive market? How much will the firm produce if it is a monopoly?
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