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Unformatted text preview: * L to be optimal is MRP ( * L | ¯ K ) = ME ( * L ) , where ME ( * L ) = W ( L ) + dW ( L ) dL L is the marginal expenditure on labor. 3. Monopsony Distortion of Resource Allocation. Perfect Competition (in both the out-put and the input market): V MP ( * L ) = w . Monoposony: V MP ( * L ) > W ( * L ). Monopsony restricts input quantity and input price below the eFcient levels. 4. Corrective Policies. • Anti-trust law. • Unionization. • Minimum wage laws....
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This note was uploaded on 10/05/2010 for the course ECON 104A taught by Professor Thomas during the Spring '10 term at UC Riverside.
- Spring '10