A monopsony owner believes that hiring an additional worker would increase the company's revenue by $150 per day. We can conclude that the monopsony pays its workers:

Question

Quizplus · Accepted Answer

If the monopsony was paying exactly or more than $150 per day, they would not be able to increase revenue by hiring an additional worker for that wage. Therefore, the monopsony must be paying less than $150 per day to its workers. The information given does not allow us to determine the exact wage, so option C is the best choice. Option D is incorrect because there is no information to suggest that the monopsony pays its workers exactly half of the revenue increase from hiring an additional worker.

A Monopsony Owner Believes That Hiring an Additional Worker Would