A minimum wage might increase employment by a monopsony if it makes the supply of labour curve to that firm
A) steeper, that is, makes supply more elastic.
B) flatter, that is, makes supply more elastic.
C) steeper, that is, makes supply less elastic.
D) flatter, that is, makes supply less elastic.

Question

Quizplus · Accepted Answer

In a monopsony, the firm has market power in hiring workers, leading to a situation where the supply curve is upward sloping. A minimum wage can make the supply curve flatter (more elastic), allowing the firm to hire more workers at the minimum wage without increasing the wage for all workers, thus potentially increasing employment.

A Minimum Wage Might Increase Employment by a Monopsony If