Figure 10.5.1
The marginal value curve and expenditure curves in the diagram above are those of a monopsony.
-Refer to Figure 10.5.1. What quantity will the monopsonist purchase to maximize profit?

Question

Quizplus · Accepted Answer

A monopsonist maximizes profit by purchasing the quantity of goods where the marginal cost of labor (MCL) equals the marginal revenue product (MRP). This is typically represented at the intersection of the MCL and MRP curves, which corresponds to quantity Q3 in standard economic models.

Figure 10.5.1 The Marginal Value Curve and Expenditure Curves in the Diagram