Suppose that one firm is the only employer of a certain labor service (i.e., the firm is a monopolist). Assume its MRPL is given by L = 11 - w and the labor supply is L = w.
(a) What is the wage paid and the number of labor hours hired by the profit-maximizing monopolist?
(b) What would be the wage and number of labor hours if the labor market were perfectly competitive?
(c) If a minimum wage law is passed that requires the monopolist to pay at least $5.50 per hour, how will this affect employment?