The Profit-Maximizing Rule for Employment of a Variable Input in a Monopsonistic

question 31

Multiple Choice

The profit-maximizing rule for employment of a variable input in a monopsonistic input market is to employ that input until:

• A) its marginal revenue product is equal to the marginal cost.
• B) its net marginal revenue is equal to the marginal cost.
• C) its marginal revenue product is greater than the marginal cost.
• D) its net marginal revenue is greater than the marginal cost.
• E) its marginal revenue product is less than the marginal cost.

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Definitions:

Longitudinal Designs

Research designs that involve repeated observations of the same subjects over a period of time, often used to study development and change.

Causal Relations

The relationship between cause and effect, where one event (the cause) leads to the outcome of another event (the effect).

Third Variables

Factors that are not directly involved in the research hypothesis but can influence the relationship between the variables being studied.

Confounds

Variables other than the independent variable that may cause an effect in an experimental design, thus confusing the results.