Use the figure below to answer the following questions.

Figure 18.3.2
-If a union forms to face the monopsonist in Figure 18.3.2, the situation is one of

Question

Use the figure below to answer the following questions.
  
Figure 18.3.2
-If a union forms to face the monopsonist in Figure 18.3.2, the situation is one of

Quizplus · Accepted Answer

In Figure 18.3.2, there is only one buyer (monopsonist) and one seller (monopolist) in the market. When a union forms to face the monopsonist, the situation becomes one of bilateral monopoly, where both the buyer and the seller possess market power. The union can negotiate with the monopsonist to reach a mutually beneficial price and quantity, leading to the creation of a single monopolistic price. Therefore, option E is the best choice.

Use the Figure Below to Answer the Following Questions