Senator Approxmire opposes a proposal requiring that the monopsonist pay a minimum wage of at least Wmin, stating: "Even if the labor market is monopsonistic, economic theory unambiguously demonstrates that imposing a minimum wage causes employment to fall." Senator Approxmire is:
A. Correct because the law of demand states that as the wage rises, the firm demands less labor
B. Incorrect because the monopsonist would offer a wage of WA, which is higher than Wmin, and maintain its employment at L1
C. Incorrect because the monopsonist's effective MRC curve becomes ABCD, which means that it will choose to hire more workers, from L1 to L2, following the imposition of the minimum wage
D. Correct because the graph indicates that at the wage of Wmin, the monopsonist would not make a profit from hiring labor and so would not hire any at all
C. Incorrect because the monopsonist's effective MRC curve becomes ABCD, which means that it will choose to hire more workers, from L1 to L2, following the imposition of the minimum wage
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