Description of this paper

The demand for labour by an industry is given by the curve L

Description

solution


Question

The demand for labour by an industry is given by the curve L = 1200 -;10w, where L is the labour demanded per day and w is the wage rate. The supply curve is;given by L = 20w.;(a) What is the equilibrium wage rate and quantity of labour hired? (b) What is the;economic rent earned by workers?;(c) Suppose now that the only labour available is controlled by a monopolistic;labour union that wishes to maximize the rent earned by union members.;What will be the quantity of labour employed and the wage rate? How does;your answer compare with your answer to (a)? (Hint: The union?s marginal;revenue curve is given by L = 1200 - 10w)

 

Paper#21303 | Written in 18-Jul-2015

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