A monopsonist's short-run demand curve for labor coincides with its marginal revenue product of labor curve.

Question

Quizplus · Accepted Answer

A monopsonist's short-run demand curve for labor does not coincide with its marginal revenue product of labor curve; instead, the monopsonist's demand curve for labor is determined by the marginal expenditure (or marginal cost) of labor, which is typically higher than the wage rate due to the monopsonist's market power and the increasing costs of hiring additional labor.

A Monopsonist's Short-Run Demand Curve for Labor Coincides with Its