A Firm Uses One Variable Factor, Labour, Which It Buys

question 89

Essay

A firm uses one variable factor, labour, which it buys as a monopsonist, to produce a single output. It sells the product in a perfectly competitive market. The firm's production function is: Y = - 7L² + 200L where Y is daily output in units and L is the number of workers employed. The output is sold at $.5 (50 cents)per unit. The supply of labour to the firm is: w(L)=28 + L
i)What is the number of workers employed ? What is the wage per worker?
ii)Calculate the deadweight loss;

---

Definitions:

Anxiety

A sensation of apprehension, anxiety, or discomfort, often regarding a forthcoming event or an unpredictable result.

Norepinephrine

A neurotransmitter and hormone involved in the body's fight or flight response, affecting heart rate, blood pressure, and glucose levels.

Reuptake Process

A mechanism in the nervous system where neurotransmitters are taken back into the neuron that released them, effectively ending the signal between neurons.

Cocaine

A powerful stimulant drug derived from the leaves of the coca plant, which can cause short-term euphoria, energy, and talkativeness.