If a firm is a monopsonist in the hiring of both labor and capital, it will obtain the profit-maximizing quantities of labor and capital when
A)MRPL / PL = MRPC /PC = 1.
B)MRPL / MRCL = MRPC / MRCC = 1.
C)the MRP of labor equals the MRP of capital.
D)the MRC of labor equals the MRC of capital.

Question

Quizplus · Accepted Answer

A monopsonist maximizes profit by equating the marginal revenue product (MRP) to the marginal resource cost (MRC) for each input, labor and capital.

If a Firm Is a Monopsonist in the Hiring of Both