Which statement best describes the behavior of the monopsonist in the labor market?
A. It hires less labor and pays a lower wage rate than in the perfectly competitive case.
B. It must pay different amounts to each unit of labor hired.
C. It hires less labor but pays the perfectly competitive wage rate.
D. It restricts its output to keep the product price high.
Answer: A
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The transformation of an invention into something that benefits the economy is known as
A) a compounder. B) an externality. C) an innovation. D) a patent.
When paper currency is decreed by governments as legal tender, legally it must be
A) paper currency backed by gold. B) a precious metal such as gold or silver. C) accepted as payment for debts. D) convertible into an electronic payment.
A market situation in which a large number of firms produce similar but not identical products is called
A) pure monopoly. B) monopolistically competitive. C) oligopolistic behavior. D) perfectly competitive.
The market clearing price refers to the:
A. equilibrium price that quantity supplied is the highest possible. B. price where quantity demanded and quantity supplied are the same. C. minimum price at which items could be sold. D. maximum price where all suppliers are willing to sell all their production.