Use the figure below to answer the following questions.

Figure 18.3.1
-Refer to Figure 18.3.1. This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve. Suppose the government passes a minimum wage law that prohibits anyone from hiring labour at less than $6.50 per hour. The monopsonist will hire

Question

Use the figure below to answer the following questions.
  
Figure 18.3.1
-Refer to Figure 18.3.1. This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve. Suppose the government passes a minimum wage law that prohibits anyone from hiring labour at less than $6.50 per hour. The monopsonist will hire

Quizplus · Accepted Answer

With the minimum wage law in place, the marginal cost of labour will increase to $6.50 per hour. Therefore, the monopsonist will hire the amount of labour where the marginal cost of labour intersects with the marginal product of labour curve at $6.50. This occurs at a quantity of 62.5 hours. Therefore, the best choice is (C) 62.5 hours of labour.

Use the Figure Below to Answer the Following Questions