To maximize profit,a monopsony will hire workers up to the point where

Question

Quizplus · Accepted Answer

A monopsony is a single buyer that has market power in the labor market. It faces an upward-sloping labor supply curve, meaning that the marginal cost of labor (MCL) is higher than the wage rate. To maximize its profit, a monopsony will hire workers up to the point where the marginal revenue product of labor (MRP) equals the marginal cost of labor (MCL). This is the same as saying MCL = MRP, which is choice C.

To Maximize Profit,a Monopsony Will Hire Workers Up to the Point