A monopsonist must raise the wage rate if it desires to hire additional workers.

Name: A monopsonist must raise the wage rate if it desires to hire additional workers.
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Question

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A monopsonist has dominant buyer power in the labor market and can therefore set a wage below the competitive equilibrium level. However, if the monopsonist wants to hire additional workers, it must raise the wage rate to attract more job seekers.

A Monopsonist Must Raise the Wage Rate If It Desires