The fact that monopoly and monopsony exist in resource markets means that
A)the marginal productivity theory of income distribution is valid.
B)resource prices do not always measure contributions to output.
C)the resulting income distribution is ethically correct.
D)income shares do not exhaust the total output.

Question

Quizplus · Accepted Answer

Resource prices in the presence of monopoly and monopsony do not always accurately reflect contributions to output because these market structures can manipulate prices and quantities to their advantage, distorting the relationship between resource prices and their actual contribution to production.

The Fact That Monopoly and Monopsony Exist in Resource Markets