When the supply curve of labor is upward sloping,the marginal cost curve of labor facing the monopsonist:
A) lies above the supply curve of labor.
B) is the supply curve of labor that it faces.
C) lies below and parallel to the supply curve of labor.
D) lies above and parallel to the supply curve of labor.

Question

Quizplus · Accepted Answer

In a monopsony, the marginal cost of labor is higher than the wage rate because the firm must raise wages to attract additional workers, which also increases wages for all existing workers. Therefore, the marginal cost curve lies above the supply curve of labor.

When the Supply Curve of Labor Is Upward Sloping,the Marginal