-(Exhibit: Monopsony) Given monopsony in the factor market, the equilibrium wage and quantity of labor would be:

Name: -(Exhibit: Monopsony) Given monopsony in the factor market, the equilibrium wage and quantity of labor would be:
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In a monopsony, the firm is the sole buyer of labor and will hire workers up to the point where the marginal revenue product (MRP) equals the marginal factor cost (MFC). The equilibrium wage is determined by the supply curve at this quantity of labor, which is W2 at L1.

-(Exhibit: Monopsony) Given Monopsony in the Factor Market, the Equilibrium