Which of the following is likely to reduce the impact of a monopsony?

Question

Quizplus · Accepted Answer

An increased ability of workers to relocate elsewhere will reduce the impact of a monopsony as it introduces competition in the labor market. If workers have the ability to relocate to other areas and seek alternative employment opportunities, monopsonistic buyers will be forced to offer more competitive wages and benefits to retain their workforce.

Choice A is incorrect because the absence of competing firms is a characteristic of a monopsony and does not reduce its impact.

Choice B is incorrect because higher search costs would make it harder for workers to find alternative employment opportunities, giving monopsonistic buyers more power in the market.

Choice D is incorrect because higher movement and information costs would also make it harder for workers to find alternative job opportunities, giving monopsonistic buyers more power in the market.

Which of the Following Is Likely to Reduce the Impact