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In our discussion of labor market pooling, we stressed the advantages of having two firms in the same location: If on firm is expanding while the other is contracting, it's to the advantage of both workers and firms that they be able to draw on a single labor pool. But it might happen that both firms want to expand or contract at the same time. Does t constitute an argument against geographical concentration? To answer this question, imagine that there are two companies that both use the same kind of specialized labor, say two film studios that make use of experts in computer animation. Suppose that there are 600 workers with this speci skill. Now compare two different scenarios: In scenario 1, both firms and all 600 workers are in the same city, and each fi is able to hire 300 workers. In scenario 2, the two firms, each with 300 workers, are in two different cities. Now suppose that both firms are expanding, increasing their demand for labor up to 335 each. In the first scenario, each firm will face a local labor of workers. (Enter your response as an integer.)

In our discussion of labor market pooling, we stressed the advantages of having two firms in the same location: If on firm is expanding while the other is contracting, it's to the advantage of both workers and firms that they be able to draw on a single labor pool. But it might happen that both firms want to expand or contract at the same time. Does t constitute an argument against geographical concentration? To answer this question, imagine that there are two companies that both use the same kind of specialized labor, say two film studios that make use of experts in computer animation. Suppose that there are 600 workers with this speci skill. Now compare two different scenarios: In scenario 1, both firms and all 600 workers are in the same city, and each fi is able to hire 300 workers. In scenario 2, the two firms, each with 300 workers, are in two different cities. Now suppose that both firms are expanding, increasing their demand for labor up to 335 each. In the first scenario, each firm will face a local labor of workers. (Enter your response as an integer.)

Microeconomics: Private and Public Choice (MindTap Course List)
Microeconomics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506893
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter9: Price Takers And The Competitive Process
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Problem 16CQ
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In our discussion of labor market pooling, we stressed the advantages of having two firms in the same location: If one firm is expanding while the other is contracting, it's to the advantage of both workers and firms that they be able to draw on a single labor pool. But it might happen that both firms want to expand or contract at the same time. Does this constitute an argument against geographical concentration? To answer this question, imagine that there are two companies that both use the same kind of specialized labor, say, two film studios that make use of experts in computer animation. Suppose that there are 600 workers with this special skill. Now compare two different scenarios: In scenario 1, both firms and all 600 workers are in the same city, and each firm is able to hire 300 workers. In scenario 2, the two firms, each with 300 workers, are in two different cities. Now suppose that both firms are expanding, increasing their demand for labor up to 335 each. In the first scenario, each firm will face a local labor of workers. (Enter your response as an integer.)
Transcribed Image Text:In our discussion of labor market pooling, we stressed the advantages of having two firms in the same location: If one firm is expanding while the other is contracting, it's to the advantage of both workers and firms that they be able to draw on a single labor pool. But it might happen that both firms want to expand or contract at the same time. Does this constitute an argument against geographical concentration? To answer this question, imagine that there are two companies that both use the same kind of specialized labor, say, two film studios that make use of experts in computer animation. Suppose that there are 600 workers with this special skill. Now compare two different scenarios: In scenario 1, both firms and all 600 workers are in the same city, and each firm is able to hire 300 workers. In scenario 2, the two firms, each with 300 workers, are in two different cities. Now suppose that both firms are expanding, increasing their demand for labor up to 335 each. In the first scenario, each firm will face a local labor of workers. (Enter your response as an integer.)
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