Use the figure below to answer the following questions.

Figure 18.3.3
-Refer to Figure 18.3.3. Suppose the government passes a minimum wage law that prohibits anyone from hiring labour at less than $8 per hour. The monopsonist will hire

Question

Use the figure below to answer the following questions.
  
Figure 18.3.3
-Refer to Figure 18.3.3. Suppose the government passes a minimum wage law that prohibits anyone from hiring labour at less than $8 per hour. The monopsonist will hire

Quizplus · Accepted Answer

In a monopsony, the firm is the sole buyer of labor and typically hires fewer workers at a lower wage than in a competitive market. When a minimum wage is set above the monopsonist's equilibrium wage, it can lead to an increase in employment up to the point where the marginal cost of labor equals the minimum wage. In this scenario, the minimum wage of $8 per hour likely results in the monopsonist hiring 350 hours of labor, as it aligns with the new equilibrium where the marginal cost of labor equals the minimum wage.

Use the Figure Below to Answer the Following Questions