That is, the aggregate supply of hockey players is given by w = 20 + 2L As demonstrated in the solutions, the aggregate demand for hockey players by the six hockey teams is given by w = 80 – 2L. We already solved for the perfectly competitive outcome and the monopsony outcome. Now, we'll consider the effects of a player's union. 1. First, assume that the players form a union, but the six teams are in competition. a) What is the equilibrium number of hockey players? What is the equilibrium wage? b) Team surplus? Player surplus? 2. Now, assume that the teams also form a league, so we have a bilateral monopoly. The league can easily coordinating the efforts of the six team owners, and thus the league has more negotiating power. In particular, the union's bargaining power is only ß = 15. a) What is the equilibrium number of hockey players? b) What is the wage that gives players all the surplus? c) What is the wage that gives teams all the surplus? d) What is the negotiated equilibrium wage? Team irplus 2 Plavor curplus2

That is, the aggregate supply of hockey players is given by w = 20 + 2L As demonstrated in the solutions, the aggregate demand for hockey players by the six hockey teams is given by w = 80 – 2L. We already solved for the perfectly competitive outcome and the monopsony outcome. Now, we'll consider the effects of a player's union. 1. First, assume that the players form a union, but the six teams are in competition. a) What is the equilibrium number of hockey players? What is the equilibrium wage? b) Team surplus? Player surplus? 2. Now, assume that the teams also form a league, so we have a bilateral monopoly. The league can easily coordinating the efforts of the six team owners, and thus the league has more negotiating power. In particular, the union's bargaining power is only ß = 15. a) What is the equilibrium number of hockey players? b) What is the wage that gives players all the surplus? c) What is the wage that gives teams all the surplus? d) What is the negotiated equilibrium wage? Team irplus 2 Plavor curplus2

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question is in the attached image. Thank you!
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Consider the following simplified scenario. Imagine that the Australian national rugby union(for short, Rugby AU) has exclusive rights to organize the games played by the national team.Rugby AU decides that the next match, between the Wallabies and the All Blacks (i.e., theAustralian and the New Zeeland national rugby teams), will be hosted at the Marvel Stadiumin Melbourne. Rugby AU has no fixed costs for organizing the game, but it must pay a marginalcost MC of $20 per seat to the owners of the Marvel Stadium. Two types of tickets will be soldfor the game: concession and full fare. Based on any official document that attests to their age,children and pensioners qualify to purchase concession tickets that offer a discounted price;everyone else pays the full fare. The demand for full-fare tickets is QF(P) = 120 – 2P. Thedemand for concession tickets is QC(P) = 80 – 2P. j) Suppose that Rugby AU becomes unable to verify the age of its customers; thus, theformerly distinct full fare and…
Consider the following simplified scenario. Imagine that the Australian national rugby union(for short, Rugby AU) has exclusive rights to organize the games played by the national team.Rugby AU decides that the next match, between the Wallabies and the All Blacks (i.e., theAustralian and the New Zeeland national rugby teams), will be hosted at the Marvel Stadiumin Melbourne. Rugby AU has no fixed costs for organizing the game, but it must pay a marginalcost MC of $20 per seat to the owners of the Marvel Stadium. Two types of tickets will be soldfor the game: concession and full fare. Based on any official document that attests to their age,children and pensioners qualify to purchase concession tickets that offer a discounted price;everyone else pays the full fare. The demand for full-fare tickets is QF(P) = 120 – 2P. Thedemand for concession tickets is QC(P) = 80 – 2P. 2. The market for concession tickets (C)f) Calculate the inverse demand, write the profit maximizing condition,…