Use the following to answer question(s): Monopsony

-(Exhibit: Monopsony) Given monopsony in the factor market, the wage would be:

Question

Use the following to answer question(s): Monopsony
 
-(Exhibit: Monopsony) Given monopsony in the factor market, the wage would be:

Quizplus · Accepted Answer

In a monopsony, the wage is determined where the marginal factor cost (MFC) curve intersects the marginal revenue product (MRP) curve. This point determines the quantity of labor hired. The wage paid, however, is found by dropping down to the supply curve from this intersection point, which is represented by W₂ in typical monopsony diagrams.

Use the Following to Answer Question(s): Monopsony