-The above figure shows the market for labor. The employer is a monopsony. If a minimum wage is set at $10 per hour, which of the following will occur?

Question

Quizplus · Accepted Answer

In a monopsony, the employer has market power and typically pays a wage lower than the competitive equilibrium. Setting a minimum wage at $10 forces the employer to pay at least that amount, so the firm will pay $10 per hour.

-The Above Figure Shows the Market for Labor