If a Monopsony Must Negotiate with a Union, Then the Wage

question 326

Multiple Choice

If a monopsony must negotiate with a union, then the wage will probably be

• A) more than the value of marginal product.
• B) more than the marginal cost of labor.
• C) the same as if there had been no union.
• D) more than what it would have been without a union but not more than the value of marginal product.

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Definitions:

Fixed Cost

Expenses that remain constant regardless of production or sales volumes, including rent, salaries, and insurance premiums.

Servicing Materials

Supplies and materials used in the maintenance or repair of equipment and machinery to ensure their proper functioning.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels of the organization.

Variable Cost

Expenses that vary directly with levels of output or production volume.