For a monopsonist in a labour market, the firm's MC curve for labour lies the competitive supply curve for labour; just as the marginal revenue curve for a monopolist lies the demand curve for its product.

Question

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For a monopsonist, the marginal cost (MC) of labor is above the supply curve because hiring additional workers requires paying a higher wage to all workers, not just the additional ones. Similarly, for a monopolist, the marginal revenue (MR) curve lies below the demand curve because selling additional units requires lowering the price for all units sold.

For a Monopsonist in a Labour Market, the Firm's MC