When Contemplating the Purchase of a Resource, the Pure Monopsonist

question 127

Multiple Choice

When contemplating the purchase of a resource, the pure monopsonist should do which of the following to maximize profit?

• A) Purchase enough to make the marginal expenditure equal to the marginal revenue product.
• B) Purchase enough to make the average expenditure equal to the marginal revenue product.
• C) Pay a wage equal to the value of MRP at the intersection of MRP and ME curves.
• D) Pay a wage equal to the value of MRP at the intersection of AE and MRP curves.

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