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Questions 24 and 25 ‘Suraksha’ is the sole producer and supplier of security systems
in India and the sole employer of locksmiths in the labour market. The demand for
security systems is D( , where p) =100 − p where p is the price. The production of security
systems only requires locksmiths and the production function is given by f (L) = 4L ,
where L is the number of locksmiths employed. The supply curve for locksmiths is
given by L(w)= max(0, w/2-20) where w is the wage rate.
24. How many locksmiths will ‘Suraksha’ employ?
a) 5
b) 10
c) 15
d) 20
25. If the government sets the minimum wage is 70 , how many locksmiths will
Suraksha employ?
a) 5
b) 10
c) 15
d) 20
Also, which book did you guys refer to for factor markets? I've tried both varian and pindyck, but still unable to solve such questions!
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