Figure 10.3
The marginal value curve and expenditure curves in the diagram above are those of a monopsony.
-Refer to Figure 10.3. What quantity will the monopsonist purchase to maximize profit?

Question

Quizplus · Accepted Answer

The monopsonist will purchase Q3 to maximize profit because at Q3, the marginal cost of labor is equal to the marginal revenue product of labor.

Figure 10.3 The Marginal Value Curve and Expenditure Curves in the Diagram