Given the same marginal revenue product (MRP) and supply curves, the equilibrium quantity of labor employed in a monopsonistic labor market will be:

Question

Quizplus · Accepted Answer

In a monopsonistic labor market, the employer has market power and can set a lower wage than in a competitive labor market. This leads to a lower quantity of labor supplied, as workers may not be willing to work at a lower wage. Therefore, the equilibrium quantity of labor employed in a monopsonistic labor market will be less than that in a competitive labor market.

Given the Same Marginal Revenue Product (MRP) and Supply Curves