Under monopsony,the wage rate

Question

Quizplus · Accepted Answer

Under monopsony, the employer has market power and can set the wage rate below the marginal revenue product of labor, thus paying workers less than what they would receive under perfect competition. Therefore, choice C is the correct answer. Choices A and B are not true because the wage rate is set by the employer, not determined by the marginal product or revenue product of labor. Choice D is also not true because monopsony leads to lower wages, not higher ones.

Under Monopsony,the Wage Rate