Exhibit 27-8

-Refer to Exhibit 27-8. In the absence of collective bargaining, what quantity of labor would the profit-maximizing monoposonist hire?

Question

Exhibit 27-8 -Refer to Exhibit 27-8. In the absence of collective bargaining, what quantity of labor would the profit-maximizing monoposonist hire? A)Q₁ B)Q₂ C)Q₃ D)Q₄ E)Q₅

Quizplus · Accepted Answer

A profit-maximizing monopsonist hires labor where the marginal factor cost (MFC) equals the marginal revenue product (MRP). This is typically at a lower quantity than in a competitive market. Without the exhibit, the specific point cannot be identified, but the correct answer is based on the principle of monopsony behavior in labor markets.

Exhibit 27-8 ​

Exhibit 27-8