Suppose a monopsonist must pay $10 per hour to attract 10 workers.If the same monopsonist must raise its wage to $11 per hour to attract the 11^th worker,what is its marginal factor cost for labor? A)$121 per hour. B)$21 per hour. C)$11 per hour. D)$10 per hour.

Question

Quizplus · Accepted Answer

The marginal factor cost (MFC) for labor is calculated by the additional cost to hire one more worker. Initially, the total cost for 10 workers is $10 * 10 = $100. To hire the 11th worker, the total cost becomes $11 * 11 = $121. The increase in total cost to hire one more worker is $121 - $100 = $21. Therefore, the MFC for the 11th worker is $21 per hour.

Suppose a Monopsonist Must Pay $10 Per Hour to Attract