Question

Suppose a monopsonist hires its second worker and this hiring has a marginal factor cost of $75 per day. if the market wage is now $62.50 per day, what was the first employee earning when she worked alone

Answer 1

Given:
marginal factor cost of 75 per day after hiring 2nd worker.
market wage is now 62.50 per day for both workers.

62.50 x 2 workers = 125
125 - 75 marginal factor cost = 50

The first employee earns 50 per day when she worked alone.