A monopsonistic employer
A) has a perfectly elastic labor supply curve.
B) is necessarily a monopolist in the product market.
C) faces a marginal resource (labor) cost that is greater than the wage rate.
D) faces a marginal resource (labor) cost that is less than the wage rate.

Question

Quizplus · Accepted Answer

A monopsonistic employer faces an upward sloping labor supply curve, meaning it must pay higher wages to attract more workers. This results in a marginal resource (labor) cost that is greater than the wage rate. It does not necessarily mean that the employer is a monopolist in the product market, so option B is incorrect. Option A is incorrect because a perfectly elastic labor supply curve would indicate perfect competition, not a monopsonistic employer. Option D is also incorrect because a marginal resource (labor) cost that is less than the wage rate would indicate a perfectly competitive labor market, not a monopsonistic employer.

A Monopsonistic Employer