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Homework answers / question archive / Cate's Ready Mix Cement Company is a monopsony

Cate's Ready Mix Cement Company is a monopsony. The table below provides information about the supply of cement technicians and the total quantity they can produce per day.

The price of a ton of cement is $10.

Wage rate ($ per day) | Number of workers | Q (tons per day) |
---|---|---|

25 | 0 | 0 |

30 | 1 | 18 |

35 | 2 | 34 |

40 | 3 | 48 |

45 | 4 | 60 |

50 | 5 | 70 |

55 | 6 | 78 |

60 | 7 | 84 |

When transaction cost is low and the problem of external costs is resolved through private negotiations, the theorem that applies is known as the:

A. Adam Smith theorem.

B. Property rights theorem.

C. Private market efficient theorem.

D. Emission rights theorem.

F. Pigovian theorem.

G. Case theorem.

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