A Union Faces a Labor Demand Curve Given by MRP_L

question 32

Essay

A union faces a labor demand curve given by MRP_L = 100 - 5L. If the union wishes to maximize the total wages of its membership, how many members will be employed and what will be the average wage?

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Definitions:

Without Reserve

An auction term indicating that the item will be sold to the highest bidder, with no minimum price set.

Bidders

Individuals or entities that offer to purchase goods, services, or properties at a specified price during an auction or tender.

Sellers

Individuals or entities that offer products or services for sale to consumers or other businesses.

Unilateral Contracts

A contract in which one party makes a promise in exchange for an act by another party, which if performed, binds the offeror to the contract.