Which of the following statements is false?
A)The evidence seems to show that there are only a few, if any, instances of pure monopsony in the real world.
B)In a monopsony setting, it is possible for a minimum wage to actually increase the number of workers hired.
C)Although in a monopsony setting it is possible for a minimum wage to actually increase the number of workers hired, it is not possible to raise wage rates continually and always increase employment, too.
D)The marginal factor cost for a monopsonist is less than the wage rate it pays workers.

Question

Quizplus · Accepted Answer

In a monopsony, the marginal factor cost (MFC) is actually higher than the wage rate it pays to workers because the monopsonist faces an upward-sloping supply curve of labor. To hire additional workers, the monopsonist must raise the wage rate not only for the additional workers but for all workers, making the MFC exceed the wage rate.

Which of the Following Statements Is False