In a Monopsonistic Input Market the Marginal Cost of Another

question 40

True/False

In a monopsonistic input market the marginal cost of another unit of an input is equal to its price because it is assumed that as the firm has to pay a higher price for one more unit of input, it must pay the same price for all units of input.

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Definitions:

Principal Reduction

The act of paying down the outstanding balance of a loan, not including interest, to reduce the principal amount owed.

Interest Payment

The amount paid by a borrower to a lender for the use of borrowed money, usually expressed as a percentage of the principal.

Note Payable

A liability representing a written promise to pay a specified amount of money at a future date, often including interest payments.

Maturity

The date on which a financial instrument, such as a bond or loan, becomes due and the principal is to be repaid.