Company towns are often decried as monopsonists.Why was it unlikely that another employer would move into a company town?
A) The marginal workers available in the company town had low marginal revenue product.
B) The existing monopsonist had a first-mover advantage.
C) The marginal workers available in the company town would demand a wage higher than that obtained at the existing monopsonist.
D) Any of the above.

Question

Quizplus · Accepted Answer

Each of the provided reasons (A, B, C) could make it unlikely for another employer to move into a company town, thereby reinforcing the monopsonistic power of the existing company.

Company Towns Are Often Decried as Monopsonists