Bridge Coal Company is the only employer in a remote and mountainous region of the country, so the firm is the monopsony buyer of labor in the market. If the price of coal increases, then the firm's:

Question

Quizplus · Accepted Answer

The MV (Marginal Value) curve shifts rightward with an increase in the price of coal because the value of the additional output produced by an extra unit of labor (marginal product of labor) becomes higher. This is because the revenue generated from selling the additional coal produced by an extra worker increases with the price of coal.

Bridge Coal Company Is the Only Employer in a Remote