In a monopsony model of the labor market, as more labor is hired, the marginal factor cost of labor
A)decreases.
B)becomes zero.
C)remains constant.
D)increases.
E)becomes identical to the wage rate.

Question

Quizplus · Accepted Answer

In a monopsony model, as more labor is hired, the marginal factor cost of labor increases because the monopsonist must pay a higher wage to each additional worker as well as to all the previous workers.

In a Monopsony Model of the Labor Market, as More