Suppose the labor market is competitive, the supply curve of labor is upward sloping, and the amount of capital is fixed. If the output market changes from a competitive market to a monopoly, what is the effect on its demand for labor? Explain
What will be an ideal response?
A monopoly will decrease output from the competitive level and thus hire fewer workers. This reduction in the demand curve for labor will result in lower wages.
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Which one of the following would likely reduce the level of structural unemployment?
A) increasing the minimum wage to encourage more people to work B) limiting unemployment insurance benefits C) strengthening restrictions on who can be licensed to enter certain professions D) increasing the level of union bargaining power
One problem associated with a monopoly firm is that it
A) produces too little output but also charges a low price. B) produces too much output and charges too low a price. C) restricts output and charges a relatively higher price than a purely competitive firm. D) is just as good as a purely competitive firm in terms of output and price.