A monopolist faces a demand curve given by P = 100-2Q. Labour is his only cost, and the wage rate is fixed at $8 per worker. Each worker has a constant marginal product MPL = 2, meaning that each additional worker produces two units of output.
(a) The MC of each unit of output will be constant here, what is it?
(b) Since you now know the MC of production, what is the profit maximizing output level for the monopolist?
(c) What price will the monopolist charge for his output?
(d) How many units of labour will be employed?