Compared with a competitive market,a monopsonist will pay a ________ wage and hire ________ workers.
A)higher;fewer
B)higher;more
C)lower;fewer
D)lower;more

Question

Quizplus · Accepted Answer

A monopsonist has monopsony power in the labor market, which means it is the only buyer of labor. Therefore, it can determine the wage rate and hire less workers than in a competitive market. The monopsonist reduces the wage rate below the competitive level as a means of maximizing profit. As a result, the monopsonist pays a lower wage and hires fewer workers than in a competitive market.

Compared with a Competitive Market,a Monopsonist Will Pay a ________