A coal-mining company is the only employer in town, and faces this supply curve for labor 72 w=48+ L 2000 where w is the daily wage, in dollars, and L. is the number of workers employed. The company faces this demand curve for coal: P=60- 10 where p is the price of coal, per ton, and Q is the number of tons sold per day. Coalminers produce 8 tons of coal cach, per day, regardless of the number hired. The mining company maximizes profit. a) How many workers will be hired, and how much profit will be made? b) Suppose a union is formed, which sets a wage of $120 per day. At this wage, according to the supply curve given above, 2000 miners are willing to work, and the company is free to hire as many of these as it wants. How many will be hired, and how much profit will be made?
A coal-mining company is the only employer in town, and faces this supply curve for labor 72 w=48+ L 2000 where w is the daily wage, in dollars, and L. is the number of workers employed. The company faces this demand curve for coal: P=60- 10 where p is the price of coal, per ton, and Q is the number of tons sold per day. Coalminers produce 8 tons of coal cach, per day, regardless of the number hired. The mining company maximizes profit. a) How many workers will be hired, and how much profit will be made? b) Suppose a union is formed, which sets a wage of $120 per day. At this wage, according to the supply curve given above, 2000 miners are willing to work, and the company is free to hire as many of these as it wants. How many will be hired, and how much profit will be made?
Chapter16: Labor Markets
Section: Chapter Questions
Problem 16.6P
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps with 2 images
Recommended textbooks for you
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Exploring Economics
Economics
ISBN:
9781544336329
Author:
Robert L. Sexton
Publisher:
SAGE Publications, Inc
Principles of Microeconomics (MindTap Course List)
Economics
ISBN:
9781305971493
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning
Principles of Microeconomics
Economics
ISBN:
9781305156050
Author:
N. Gregory Mankiw
Publisher:
Cengage Learning