Doggy Treats is hiring in a perfectly competitive market. The firm pays each worker a wage of $300. The treats sell for $10 each.
Quantity of Labor
Total Product
0
0
1
300
2
400
3
475
4
525
5
550
Part 1
Based upon the information above, what is Doggy Treats profit maximizing point for labor? Why?
Part 2
If Doggy Treats were to become a monopsony, how would the monopsony compare to perfect competition in terms of wages?