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.

---

Definitions:

Perpetual Inventory System

A method of inventory management where records are updated in real-time with every sale and restocking.

FOB Shipping Point

A term in shipping where the buyer assumes responsibility for the goods and shipping cost as soon as the goods leave the seller’s premises.

Freight Charges

Costs incurred for transporting goods from one place to another by sea, air, or land.

Trade Discount

A reduction in the listed price of goods or services offered by sellers to buyers in a commercial transaction.