The following figure represents the equilibrium in the labor market.Figure 14.4
In the figure,
MFC: Marginal Factor Cost curve
D: Demand or the Marginal Revenue Product curve
S: Supply curve
-Refer to Figure 14.4. A monopsonist will pay the wage rate _____ and hire _____ units of labor.

Question

The following figure represents the equilibrium in the labor market.Figure 14.4

In the figure,
MFC: Marginal Factor Cost curve
D: Demand or the Marginal Revenue Product curve
S: Supply curve
-Refer to Figure 14.4. A monopsonist will pay the wage rate _____ and hire _____ units of labor.

Quizplus · Accepted Answer

A monopsonist determines its level of employment where the marginal factor cost (MFC) equals the marginal revenue product (MRP) of labor. The wage rate paid is then determined by the supply curve at this quantity of labor, which typically results in a lower wage and different quantity of labor than in a competitive market.

The Following Figure Represents the Equilibrium in the Labor Market