When Firm J Hired Its Tenth Worker,its Labour Cost Rose

question 120

Multiple Choice

When firm J hired its tenth worker,its labour cost rose by $20.For firm J to be classified as a monopsonist,it must be the case that hiring the eleventh worker will

• A) increase labour cost by $20.
• B) cause labour cost to rise.
• C) increase labour cost by less than $20.
• D) decrease average cost.
• E) increase labour cost by more than $20.

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Definitions:

Demand

The desire and ability of consumers to purchase goods and services at various prices.

Law of Demand

States that, all other factors being equal, as the price of a good increases, demand for that good decreases, and vice versa.

Quantity Demanded

The amount of a good or service that consumers are willing and able to purchase at a specific price.

Price

The amount of money required to purchase a good or service, determined by factors such as supply and demand.