Question
Consider a firm with a production function Q=LαKβ
operating in a perfectly competitive product market with price P. If the firm is a monopsonist in the labor market, its optimal hiring rule is determined by setting:Solution
Solution: A profit-maximizing firm hires labor until the marginal benefit of an additional worker equals the marginal cost of that worker: · Marginal Benefit: The extra revenue generated by one more worker, which is the Marginal Revenue Product of Labor (MRPL). (MRPL=MR×MPL). · Marginal Cost: The extra cost of hiring one more worker, which is the Marginal Factor Cost of Labor (MFCL). Since the firm is a monopsonist (a sole buyer of labor), it faces an upward-sloping labor supply curve, meaning MFCL>w. Thus, the monopsonist's optimal rule is MRPL=MFCL, which leads to a lower quantity of labor hired and a lower wage paid compared to a competitive market.
A merchant bought two items: a mixer and a juicer for Rs. 9,500. He sold the mixer at a profit of 30% and the juicer at a loss of 20%. Determine the cos...
A shopkeeper sold an article at marked price and got a profit of 60%. If he had given a discount of 10%, then find his new profit percent.
Abhijit buys an old scooter for Rs. 3700 and spends Rs. 300 on its repairs. If he sells the scooter for Rs. 5500, his gain percent is
Amazon allows 15% discount to his customers and still earn 19% profit. If the production cost of the product is increased by 12% therefore Amazon issued...
A shopkeeper marked an article Rs. 250 above the cost price and sold it after giving two successive discounts of 5% and 25% respectively, and faces a lo...
- A dishonest shopkeeper marks up the price of his produce by 40% on the cost price and sells it providing a discount of 25%. If he uses 800 gram as weight i...
A certain article is marked up by 30% above its cost price and sold for Rs. 5200, making a profit of 25%. Find the marked price of the article.
A shopkeeper buys 20 articles for ₹5000 and sells them at a profit of 30%. What is the selling price of each article?
A seller marks up the price of an article by 35% and then gives a discount of 20%. What is the profit if the marked price of the article is ₹810?
A man purchases 60 kg of wheat at ₹20 per kg and 40 kg of rice at ₹30 per kg. He mixes them and sells the mixture at ₹28 per kg. Find his percenta...
