Drive Teenagers Out of the Labor Force?” Journal of Labor Research, 26(1) (Winter 2005): 169–176 ANSWER TO TRY IT! PROBLEM The imposition of a minimum wage of $40 per day makes the MFC curve a horizontal line at $40, up to the S curve In this case, the firm adds a fourth worker and pays the required wage, $40 14.3 Price Setters on the Supply Side LEARNING OBJECTIVES Explain and illustrate how a monopoly supplier of some factor of production maximizes profit Discuss some of the ways that labor unions try to exercise market power Define bilateral monopoly and explain and illustrate why prices in the model are indeterminate Explain how professional associations and producers’ cooperatives affect supply Buyers are not the only agents capable of exercising market power in factor-pricing choices Suppliers of factor services can exercise market power and act as price setters themselves in two ways First, a supplier may be a monopoly or have a degree of monopoly power in the supply of a factor In that case, economists analyze the firm’s choices as they would analyze those of any other imperfectly competitive firm Second, individual suppliers of a factor of production may band together in an association to gain clout in the marketplace Farmers, for example, often join forces to Attributed to Libby Rittenberg and Timothy Tregarthen Saylor URL: http://www.saylor.org/books/ Saylor.org 760