Because a Monopsony Is the Only Buyer in a Particular

question 245

Multiple Choice

Because a monopsony is the only buyer in a particular market, the

• A) supply of labor to the monopsony is perfectly elastic.
• B) supply of labor to the monopsony is perfectly inelastic.
• C) supply of labor curve faced by the monopsony is upward sloping.
• D) supply of labor curve faced by the monopsony is downward sloping.

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Definitions:

Consumer Surplus

The difference between the potential total payment by consumers for a product or service and the actual total payment they make.

Producer Surplus

The difference between the amount that producers are willing and able to sell a good for and the actual amount they receive.

Price Elasticity

An indicator of the degree to which demand for a product reacts to variations in its price, showing how sensitive the demand for the good is to price alterations.

Price Discrimination

A method of setting prices where a provider charges different amounts for the same or almost the same items or services to different customers or in various locations.