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Suppose the Demand Faced by a Labor Monopsony Is W

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Essay

Suppose the demand faced by a labor monopsony is W = 40,000 - 100l, where W is the annual wage and L is the number of workers hired. The labor supply is given by W = 10,000 + 100l.
a. Derive the marginal expenditure equation.
b. Determine the wage the monopsonist would pay and how many workers it would hire.


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