Senator Approxmire opposes a proposal requiring that the monopsonist pay a minimum wage of at least W_min, stating: "Even if the labor market is monopsonistic, economic theory unambiguously demonstrates that imposing a minimum wage causes employment to fall."
Senator Approxmire is:

Question

Senator Approxmire opposes a proposal requiring that the monopsonist pay a minimum wage of at least W<sub>min</sub>, stating: Even if the labor market is monopsonistic, economic theory unambiguously demonstrates that imposing a minimum wage causes employment to fall. Senator Approxmire is: A) correct because the law of demand states that as the wage rises, the firm demands less labor. B) incorrect because the monopsonist would offer a wage of W<sub>A</sub>, which is higher than W<sub>min</sub>, and maintain its employment at L<sub>1</sub>. C) incorrect because the monopsonist's effective MRC curve becomes ABCD, which means that it would choose to hire more workers, from L<sub>1</sub> to L<sub>2</sub>, following the imposition of the minimum wage. D) correct because the graph indicates that at the wage of W<sub>min</sub>, the monopsonist would not make a profit from hiring labor and so would not hire any at all.

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The Answer of Senator Approxmire opposes a proposal requiring that the monopsonist pay a minimum wage of at least W_min, stating: "Even if the labor market is monopsonistic, economic theory unambiguously demonstrates that imposing a minimum wage causes employment to fall." Senator Approxmire is:

Senator Approxmire Opposes a Proposal Requiring That the Monopsonist Pay