The monopsonist will employ labor to the point at which the

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A monopsonist, as a single buyer in the labor market, will employ labor up to the point where the marginal factor cost (MFC) equals the marginal revenue product (MRP) of labor. This is because the monopsonist faces an upward-sloping labor supply curve, meaning that to hire additional workers, it must pay a higher wage not only to the additional workers but also to all the previously hired workers, which increases the MFC.

The Monopsonist Will Employ Labor to the Point at Which