Which of the following is true for a monopsony?
A)It can buy additional units of a factor without increasing the price it pays for the factor.
B)It can buy additional Units of a factor without increasing the price it pays for the factor.
C)The supply of labor it faces is the industry supply of labor.
D)The supply of labor curve lies above the firm's MFC curve.

Question

Quizplus · Accepted Answer

In a monopsony, the firm is the sole buyer of a factor, such as labor, in the market. Therefore, the supply of labor it faces is the industry supply of labor.

Which of the Following Is True for a Monopsony