In order to maximize profits,an output market monopoly will:
A)pay less than the going wage rate.
B)pay a wage equal to the marginal value product of labor.
C)pay a wage that is less than marginal value product of labor.
D)pay workers a higher-than-competitive wage rate.

Question

Quizplus · Accepted Answer

A monopoly in the output market will seek to maximize profits by paying a wage that is less than the marginal value product of labor. This allows the firm to capture more of the value generated by the labor, increasing its profits.

In Order to Maximize Profits,an Output Market Monopoly Will