Exhibit 11-12 A monopsonist
-In Exhibit 11-12, we know this exhibit shows a monopsonistic labor market because:

Question

Exhibit 11-12 A monopsonist 
-In Exhibit 11-12, we know this exhibit shows a monopsonistic labor market because:

Quizplus · Accepted Answer

The MFC curve lies above the supply of labor curve, which indicates that the monopsonist has to pay a higher wage rate to hire more workers. This is a characteristic of a monopsonistic labor market, where a single buyer (employer) has market power in hiring workers. The other options are incorrect: A) The MRP curve slopes down is not enough to determine a monopsonistic labor market. B) The market supply of labor curve is horizontal is a characteristic of a perfectly competitive labor market, not a monopsonistic one. D) The MRP curve lies below the supply of labor curve could indicate market power, but it is not specific to monopsony. E) Wages are below the supply of labor curve is true for both monopsonistic and perfectly competitive labor markets, depending on the demand and supply conditions.

Exhibit 11-12 a Monopsonist