The following figures show the demand and supply of labor in two different types of labor market. Figure 29.5 In the figures,
D: Demand curve for labor
S: Supply curve of labor
MRP: Marginal revenue product
MFC: Marginal factor cost
The Market B described in Figure 29.5 is a(n):

Question

The following figures show the demand and supply of labor in two different types of labor market. Figure 29.5  In the figures,
D: Demand curve for labor
S: Supply curve of labor
MRP: Marginal revenue product
MFC: Marginal factor cost
The Market B described in Figure 29.5 is a(n):

Quizplus · Accepted Answer

Market B is a monopsonistic market because there is only one buyer of labor. This is reflected in the fact that the MFC curve is above the supply curve, indicating that the employer has some market power in setting wages. This is different from a perfectly competitive market where the MFC curve would be equal to the supply curve.

The Following Figures Show the Demand and Supply of Labor