Exhibit 11-13 A monopsonist's supply and marginal revenue product data $$\begin{array} { | c | c | c | }
\hline \text { Workers } & \text { Wage Rate } & \text { MRP } \
\hline 1 & \$ 8 & \$ 50 \
2 & 9 & 25 \
3 & 10 & 20 \
4 & 11 & 17 \
5 & 12 & 16 \
6 & 13 & 13 \
\hline
\end{array}$$
-In Exhibit 11-13, what is the marginal factor cost when the monopsonist hires 4 workers?

Question

Exhibit 11-13 A monopsonist's supply and marginal revenue product data $$\begin{array} { | c | c | c | } 
\hline \text { Workers } & \text { Wage Rate } & \text { MRP } \
\hline 1 & \$ 8 & \$ 50 \
2 & 9 & 25 \
3 & 10 & 20 \
4 & 11 & 17 \
5 & 12 & 16 \
6 & 13 & 13 \
\hline
\end{array}$$
-In Exhibit 11-13, what is the marginal factor cost when the monopsonist hires 4 workers?

Quizplus · Accepted Answer

The marginal factor cost (MFC) is the additional cost of hiring one more worker. When hiring the 4th worker, the wage rate increases from $10 to $11, and the total wage cost increases from $30 (3 workers at $10 each) to $44 (4 workers at $11 each). Therefore, the MFC is $44 - $30 = $14.

Exhibit 11-13 a Monopsonist's Supply and Marginal Revenue Product Data