Data in the Following Table Refer to the Purchase of a Resource

question 73

Essay

Data in the following table refer to the purchase of a resource by a pure monopsonist. Let the resource be labor time L, measured in hundreds of hours per day.
Units of Labor Marginal Average Marginal Revenue
Input Expenditure Expenditure Product
L ME AE MRP
1 10 10 16
2 12 11 15
3 14 12 14
4 16 13 13
5 18 14 12
6 20 15 11
7 22 16 10
8 24 17 9
a. Determine the profit maximizing purchase rate of labor for the monopsonist.
b. If this market were not monopsonistic but competitive, what would be the purchase rate of labor time?
c. Determine the equilibrium wage rate in both the monopsonistic and competitive markets.

---

Definitions:

Placental Barrier

The physical and biochemical barrier formed by the placenta that regulates the exchange of substances between the maternal and fetal bloodstreams.

Unborn Child

A term referring to a fetus or embryo that has not yet been born, specifically in the context of healthcare, legal discussions, or moral debates.

Sperm Cell Production

The process of generating sperm cells, which are male reproductive cells responsible for fertilization.

Jellylike Outer Covering

This may refer to a biological feature of organisms, such as the vitreous humor in the eye or the jellylike layer surrounding some bacterial cells.