In a Monopsonistic Input Market the Marginal Cost of Another

question 34

Multiple Choice

In a monopsonistic input market the marginal cost of another unit of an input is greater than its price because it is assumed that:

• A) the firm pays a constant price to get an additional unit of input per time period.
• B) the firm has to pay a higher price to get an additional unit of input per time period.
• C) the firm pays a lower price for each additional unit of input per time period.
• D) the firm has to pay a higher price to get a lower number of units of input per time period.
• E) the firm has to pay a constant price to get a constant number of units of input per time period.

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Definitions:

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