The MRP and labor supply schedules are given below: Number of Workers MRP Wage R
ID: 2428863 • Letter: T
Question
The MRP and labor supply schedules are given below:
Number of
Workers
MRP
Wage Rate
1
$8.00
$5.00
2
7.50
5.50
3
7.00
6.00
4
6.50
6.50
5
6.00
7.00
6
5.50
7.50
Construct the MFC schedule of the monopsonist.
What level of employment satisfies the monopsonist’s rule of profit maximization?
Given your answer to b, what wage the monopsonist pay in order to maximize profit?
Suppose the monopsonist is now confronted with minimum wage of $6.50. Construct Monopsonist’s new labor supply schedule assuming the monopsonist must pay each worker a wage of at least %6.50.
Construct the MFC schedule associated with this new labor supply schedule.
Given the minimum wage of $6.50, what level of employment satisfies the monopsonost’s rule for profit maximization?
Given your answer to f, what wage must the monopsonist pay in order to maximize profit?
Does the minimum wage cause the monopsonist to increase or decrease the level of employment?
Number of
Workers
MRP
Wage Rate
1
$8.00
$5.00
2
7.50
5.50
3
7.00
6.00
4
6.50
6.50
5
6.00
7.00
6
5.50
7.50
Explanation / Answer
1) First we collect wage rates and workers' number. Then we will find out the Tata for Commerce Corps schedule.
Number of
Workers
MRP
Labour supply
TFC
MFC
1
8
5
5
5
2
7.5
5.5
11
6
3
7
6
18
7
4
6.5
6.5
26
8
5
6
7
35
9
6
5.5
7.5
45
10
2.) At a level of employment = 4 workers the monopsonist’srule of profit maximization is satisfied. This is done when MFC isequal to MRP.
3.) Given the answer to b, the wage rate the monopsonist pay inorder to maximize profit is found from the supply curve which is $6per hourhedule.&aqs=chrome..69i57.842j0j9&sourceid=chrome&ie=UTF-8
4.) Suppose monosnist has to face a minimum wage of $ 6.50. Monoanist's new labor-supply program requires each worker to pay atleast 6.50 USD so that they were valued at 6.50 dollars so that they could get lesser wages of $ 6.50.
Number of
Workers
MRP
Labour supply
TFC
MFC
1
8
6.5
6.5
6.5
2
7.5
6.5
13
6.5
3
7
6.5
19.5
6.5
4
6.5
6.5
26
6.5
5
6
7
35
9
6
5.5
7.5
45
10
5.) The new MFCs linked to this new labor supply are available on schedule
6.) If a minimum wage of $ 6.50 is paid; Gaining a job opportunity monosponost's rule to improve profits is satisfactory 5 workers
7.) To answer your questions, the minimum wage of $ 6.50 is now getting maximum benefit from them.
8.) In this sense, increases the employment level of the monosonyi due to minimum wages.
Number of
Workers
MRP
Labour supply
TFC
MFC
1
8
5
5
5
2
7.5
5.5
11
6
3
7
6
18
7
4
6.5
6.5
26
8
5
6
7
35
9
6
5.5
7.5
45
10
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