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Teaching Since: Apr 2017
Last Sign in: 273 Weeks Ago, 1 Day Ago
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  • MBA,PHD in Psychology
    Northwest Florida State College
    Jun-1992 - May-1997

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    Northwest Florida State College,
    Aug-2006 - Nov-2015

Category > Economics Posted 08 May 2017 My Price 9.00

Using the same information as in Exercise 8

1. Using the same information as in Exercise 8, suppose now that the only labor available is controlled by a monopolistic labor union that wishes to maximize the rent earned by union members. What will be the quantity of labor employed and the wage rate? How does your answer compare with your answer to Exercise 8? Discuss. (Hint: The union"s marginal revenue curve is given by MR = 120 - 0.2L.)

*2. A firm uses a single input, labor, to produce output q according to the production function q = 8.JL. The commodity sells for $150 per unit and the wage rate is $75 per hour.

a. Find the profit-maximizing quantity of L.

b. Find the profit-maximizing quantity of q.

c. What is the maximum profit?

d. Suppose now that the firm is taxed $30 per unit of output and that the wage rate is subsidized at a rate of $15 per hour. Assume that the firm is a price taker, so the price of the product remains at $150. Find the new profit-maximizing levels of L, q, and profit.

e. Now suppose that the firm is required to pay a 20 percent tax on its profits. Find the new profit maximizing levels of L, q, and profit.

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Status NEW Posted 08 May 2017 12:05 PM My Price 9.00

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