Suppose n identical Cournot firms purchase labor in a competitive labor market. How is the market demand for labor affected by the number of firms in the market?
What will be an ideal response?
Each firm chooses a quantity of labor demanded such that w = p(1 + 1/n?) MPL. As n increases, the demand for labor curve from the individual firm shifts leftward. With the increase in the number of firms, however, market demand shifts rightward.
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If the marginal utility Ida Mae receives from eating chicken wings is negative then
A) her total utility from eating chicken wings has fallen. B) Ida Mae definitely does not like chicken wings. C) her total utility has risen, but by less from the last chicken wing than from the next to last chicken wing. D) her total utility from eating chicken wings is negative as well.
Walmart is known for entering small towns and driving out its competitors. Using the theory of countervailing power, explain why the growth of Walmart may have actually increased, rather than decreased, efficiency in the United States