Which of the following would be most able to act like a monopsonist?
A) a hospital in a small isolated town
B) a hospital in a very big city
C) a law firm in Washington, D.C.
D) a computer software firm in Silicon Valley

Question

Quizplus · Accepted Answer

A hospital in a small isolated town would have a limited pool of potential employees, making them the only buyer in the local labor market. This gives them the power to set the wage rate that they are willing to pay without having to worry about competition from other employers. This is characteristic of a monopsonistic market structure.

Which of the Following Would Be Most Able to Act