The distinguishing characteristic of labor market monopsonies is the fact that
A)They can hire any number of workers they want without affecting the market wage.
B)Their hiring decisions directly affect the market wage rate.
C)They can pay any wage they want for the number of workers they need.
D)They must usually hire unionized workers.

Question

Quizplus · Accepted Answer

Labor market monopsonies have market power in hiring workers and their decisions directly affect the market wage rate. This is because they are the only buyer of labor in the relevant market. They cannot simply hire any number of workers they want without affecting the market wage, as their actions will have an impact on the supply and demand for labor in that market. While they may have some ability to pay any wage they want, this will also have an impact on the supply of workers and ultimately the market wage rate. The presence of a union is not a defining characteristic of a labor market monopsony.

The Distinguishing Characteristic of Labor Market Monopsonies Is the Fact