Suppose that the industry supply curve is given by W = 10 + L, and a monopsonist faces a marginal revenue product of $30 per worker. 

a. Determine the perfectly competitive wage, employment, producer surplus and consumer surplus, interpreting what the producer and consumer surplus mean intuitively so a parent or friend could understand (in your response, make sure to communicate who the producers and consumers are). 

b. Determine the monopsony wage, employment, producer surplus and consumer surplus. 

c. Assume there are two identical employers in the industry and that each acts as a Cournot firm, each choosing its quantity of labor. Find and analyze the difference in wages.

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a In a perfectly competitive industry the wage is determined by supply and demand The industry supply curve is given by W 10 L The marginal revenue pr... View the full answer