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 local population declines and there are fewer qualified coal miners available, which one of the curves used to determine the monopsony outcome in this market shifts?

Question

Quizplus · Accepted Answer

The ME and AE curves shift because the decline in the local population and the availability of qualified coal miners will affect both the marginal expenditure curve and the average expenditure curve.

Bridge Coal Company Is the Only Employer in a Remote