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Business, 25.11.2019 20:31 genyjoannerubiera

Acompany is considering building a new factory. the factory will cost c to build. to operate, the factory requires 100 workers. once operating, it will generate p profits. if the company builds the factory and hires workers at a wage w it makes a payoff of: p-100w - c. if the company builds a factory but fails to hire workers, it makes a payoff of ( negative c (i. e. -c). if it doesn't build the factory, it makes 0 . the prospective workers currently have jobs that pay a wage of v. the worker's payoff is equal to their wages (either at the new factory or their current jobs).a) suppose the worker can be hired at their current wage (w=v). for what values of c will the firm build the factory? b) after the factory is built, the worker's demand that the firm accede to their wage demand or not have the factory operate (and thus loose the c investment). what demand will the workers make? anticipating this offer, what values of c will the firm build the factory?

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