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The Supply of Labour to a Monopsonistic Firm Is W

Question 17

Multiple Choice

The supply of labour to a monopsonistic firm is w = 10 + z, where w is the wage rate and z is quantity of labour. The firm's MRP = 70 - z. The firm employs only labour. Relative to the monopsony equilibrium, the aggregate payment to labour will not decrease if the maximum wage is:


A) less than $60.
B) less than $55.
C) less than $50.
D) less than $45.

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