A firm is a monopsonistic buyer of labour, and the relationship between the MRPL and L, the amount of labour employed, is given by MRPL = 100 - O.BL   The supply of labour to the firm is such that L =...

A firm is a monopsonistic buyer of labour, and the relationship between the MRPL and L, the amount of labour employed, is given by MRPL = 100 - O.BL

The supply of labour to the firm is such that L = 2.5w- 50 where w is the wage rate.

Answer the following questions, either by drawing a graph or mathematically. What amount of labour will the firm employ to maximize profit, and what wage will be paid? If the workers form a trade union and can force a minimum wage rate, what is the maximum amount of L that they can cause to be employed? If they try to maximise the wage paid to those at present employed what will this be?