Monopsonistic exploitation is

Question

Quizplus · Accepted Answer

Monopsonistic exploitation refers to a situation where there is a single buyer in a market, in this case, an employer who can exploit their market power to pay lower wages than in a competitive market. The difference between the marginal revenue product (MRP) of labor and the wage paid can indicate the level of monopsonistic exploitation. If the MRP is higher than the wage, it suggests that the employer is benefiting from monopsonistic power and paying less than the value the worker adds to the firm. Therefore, option B is the correct choice.

Monopsonistic Exploitation Is