The labor supply curve facing a purely competitive employer is _, whereas the labor supply curve facing a monopsonist is .
A) upsloping; horizontal
B) downsloping; vertical
C) vertical; upsloping
D) horizontal; upsloping

Question

Quizplus · Accepted Answer

In a purely competitive labor market, the employer is a wage taker and faces a horizontal labor supply curve at the market wage rate. In a monopsony, the employer is the sole buyer of labor and faces an upward-sloping labor supply curve because they must pay higher wages to attract more workers.

The Labor Supply Curve Facing a Purely Competitive Employer Is