In a monopsony labor market:

Question

Quizplus · Accepted Answer

In a monopsony labor market, there is only one employer or buyer of labor, giving them the power to pay a lower wage than what would be seen in a competitive market. This is because workers have limited alternative job options, and the employer can use their market power to pay less. Therefore, the correct choice is C, where the employer pays a low wage. The other options are not necessarily true in a monopsony market. While unions may exist and bargain for better wages, they may still not have enough bargaining power to overcome the employer's market advantage. Human capital may also not provide much of an advantage if job opportunities are limited. Benefits may be used to attract employees, but it does not necessarily mean the employer is paying a fair market wage.

In a Monopsony Labor Market