The marginal factor cost for labor is
A) The net cost to a monopsonist of hiring an additional unit of labor.
B) The net gain to a monopolist seller of labor if an additional unit of labor is hired.
C) The demand for labor.
D) The supply of labor.

Question

Quizplus · Accepted Answer

Marginal factor cost for labor refers to the additional cost to a firm of hiring an additional unit of labor. For a monopsonist, this includes any increase in wage payment, as well as any increase in non-wage costs such as training or supervision. Therefore, the correct choice is A.

The Marginal Factor Cost for Labor Is