Use the following to answer question 63-70.
Exhibit: Monopoly and Monopsony

-(Exhibit: Monopoly and Monopsony) In monopsony, _______ is determined by the point on the ________ curve that corresponds to the profit-maximizing quantity of the factor.

Question

Use the following to answer question 63-70.
Exhibit: Monopoly and Monopsony
 
-(Exhibit: Monopoly and Monopsony) In monopsony, _______ is determined by the point on the ________ curve that corresponds to the profit-maximizing quantity of the factor.

Quizplus · Accepted Answer

In a monopsony, the factor price is determined by the point on the supply curve that corresponds to the profit-maximizing quantity of the factor. This is because a monopsonist faces the entire market supply curve for the factor it wishes to purchase, and the price it pays is determined by the quantity it chooses to buy, as indicated on the supply curve.

Use the Following to Answer Question 63-70