Which is characteristic of monopsony?
A) The type of labor employed is relatively mobile.
B) The supply curve for labor lies above the marginal resource cost curve.
C) The wage rate it must pay workers varies directly with the number of workers it employs.
D) The firm's employment is a small portion of the total employment of that type of labor.

Question

Quizplus · Accepted Answer

In a monopsony, the firm is the sole or dominant employer in the labor market, so it faces an upward-sloping labor supply curve. This means that to hire additional workers, the firm must pay a higher wage rate, which varies directly with the number of workers it employs.

Which Is Characteristic of Monopsony