Monopolistic exploitation of labor occurs when a monopoly hires less labor than a competitive firm and its workers are paid less than the value of their marginal products.

Question

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In a monopolistic market, the employer has significant control over the labor market and can set wages below the value of the marginal product of labor, leading to exploitation as workers are paid less than the value of their contributions. This contrasts with competitive markets, where wages tend to align more closely with the value of the marginal product due to competition among employers.

Monopolistic Exploitation of Labor Occurs When a Monopoly Hires Less