A monopsonist is a firm which
A)is a "sole-buyer" in an input market.
B)faces a downward sloping demand curve for its output.
C)is a price taker in the labor market.
D)faces a horizontal demand curve for labor.

Question

Quizplus · Accepted Answer

A monopsonist is a firm that has market power in the input market, as it is the sole buyer of a particular input. It can use this power to pay lower wages or prices to suppliers of the input than it would in a competitive market, due to the absence of other buyers who could bid up the price.

A Monopsonist Is a Firm Which