-Refer to the above table. If the marginal revenue product is $21, how many workers will the profit maximizing monopsonist hire and what wage will they pay each worker?

Question

Quizplus · Accepted Answer

To determine the number of workers a profit-maximizing monopsonist will hire, we look for the point where the marginal revenue product (MRP) equals the marginal factor cost (MFC). Given an MRP of $21, the monopsonist will hire 2 workers because at that level, the MRP equals the MFC. The wage paid to each worker is determined by the supply curve, which indicates a wage of $19 for 2 workers.

-Refer to the Above Table