Consider a monopsonistic labour market. One hundred units of labour will be supplied if the wage rate is $12, and 101 units of labour will be supplied if the wage rate is $14. The marginal cost of the 101st worker is

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Quizplus · Accepted Answer

The marginal cost of the 101st worker is the additional cost incurred by hiring one more worker. The total cost for 100 workers is 100 * $12 = $1200. For 101 workers, it's 101 * $14 = $1414. The marginal cost is $1414 - $1200 = $214.

Consider a Monopsonistic Labour Market