Multiple Choice

-In Exhibit P-7, suppose that the market price for games is $15 and that each worker could make one game each hour. When the firm trains the workers to make them more productive,they will be able to make three games each hour. What will happen to the return to monopsony power if the marginal physical product of labor increases from one to threegames per hour?
A) c and e
B) It grows, but we cannot say by how much.
C) It grows by $90,000.
D) It grows by $100,000.
E) It becomes $100,000
Correct Answer:
Verified
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