Mines located in rural mountain towns in Kentucky and West Virginia are often the only employers in the area.In other words,a mining company in Kentucky would be considered:
A)a monopolist in the labor market.
B)a monopsonist in the labor market.
C)an output-market monopoly.
D)a profit-maximizing competitive firm.

Question

Quizplus · Accepted Answer

A monopsonist is a single buyer in a market, and in this case, the mining company is the only significant employer in the area. As a result, the company can exert significant market power over the labor market, allowing it to dictate wages and working conditions for employees. Thus, the best choice is B, a monopsonist in the labor market.

Mines Located in Rural Mountain Towns in Kentucky and West