Use the following figure to answer the question : Figure 16-2 :shows the marginal cost [MC],average cost [AC],and demand [D] curves for a monopsonist in the labor market.

-Refer to Figure 16-2.When the monopsonist is in equilibrium,the level of labor employed is _____.
A)A
B)B
C)C

Question

Use the following figure  to answer the question : Figure 16-2 :shows the marginal cost [MC],average cost [AC],and demand [D] curves for a monopsonist in the labor market.

-Refer to Figure 16-2.When the monopsonist is in equilibrium,the level of labor employed is _____.
A)A 
B)B 
C)C

Quizplus · Accepted Answer

In a monopsony, the equilibrium level of labor is determined at the point where the marginal expense (ME) curve intersects the marginal revenue product (MRP) curve. This point indicates the most cost-effective level of labor for the monopsonist, where the additional cost of hiring one more unit of labor equals the additional revenue generated by that labor. In the context provided, without seeing Figure 16-2, this explanation applies to how monopsonies typically operate in labor markets.

Use the Following Figure to Answer the Question