Because a monopsony is the only buyer in a particular market, the
A) supply of labour to the monopsony is perfectly inelastic.
B) supply of labour curve faced by the monopsony is downward- sloping.
C) supply of labour to the monopsony is perfectly elastic.
D) supply of labour curve faced by the monopsony is upward- sloping.

Question

Quizplus · Accepted Answer

In a monopsony, the firm is the sole buyer of labor, so it faces the entire market supply curve of labor, which is typically upward-sloping. This means that to hire more workers, the monopsony must offer higher wages.

Because a Monopsony Is the Only Buyer in a Particular