Suppose that a monopoly firm finds that its MR is $68 for the first unit sold each day, $67 for the second unit sold each day, $66 for the third unit sold each day, and so on. Further suppose that the first worker hired produces 5 units per day, the second 4 units per day, the third 3 units per day, and so on.
a. What is the firm's MRP for each of the first five workers?
Worker MRP Unregulated
1 $
2 $
3 $
4 $
5 $
b. Suppose that the monopolist is subjected to rate regulation and the regulator stipulates that it must charge exactly $58 per unit for all units sold. At that price, what is the firm's MRP for each of the first five workers?
Worker MRP Regulated
1 $
2 $
3 $
4 $
5 $
c. If the daily wage paid to workers is $242 per day, how many workers will the unregulated monopoly demand? worker(s)
If the daily wage paid to workers is $242 per day, how many workers will the regulated monopoly demand? worker(s)
d. If the daily wage paid to workers falls to $113 per day, how many workers will the unregulated monopoly demand? worker(s)
If the daily wage paid to workers falls to $113 per day, how many workers will the regulated monopoly demand? worker(s)