27. The large business (monopoonisi) will seek to hire workers and pay a wage ra

Question

27. The large business (monopoonisi) will seek to hire workers and pay a wage rale of w E. hire Q workers and pay a wage rate of w c Wa d. between Wa and w 29. If economic conditions favor the union, the final negotisted wage rate will be closer to can't be determined since no information is glven about the business 30. A purely competitive industry would a hire Q workers and pay a wage rate of W hire Qn workers and pay a wage rate of W c. hire Q workers and pay a wage rate of W d. can't be determined

Explanation / Answer

Answer 27 - According to the given diagram a monopsonist will seek to hire 'Qm' workers and pay wage rate of 'Wm'. A monopsonist is a wage maker thus he determined wage rate where marginal resource cost (MRC) equal to MRP (demand curve for labor). In the given diagram monopsonist wage rate is 'Wm'.

Option A is the correct answer.

Answer 28 - The union want the wage rate in between 'Wc' and "Wm'. The union will try to increase wage to the purely competitive wage rate. Thus union will want to determine wage rate at between 'Wc'.  

Option D is the correct answer.

Answer 29 - If economic condition favors the union, the final negotiated wage rate will be closer to 'Wc'. The union will want to determine wage rate equal to purely competitive wage rate.

Option B is the correct answer.

Answer 30 - A purely competitive industry will hire 'Qc' worker and pay 'Wc' wage rate. At this point supply curve for labor and demand curve for labor are equal.

Option A is the correct answer.

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