Suppose Your Firm Is a Monopsonist Hiring Only One Variable

question 37

Multiple Choice

Suppose your firm is a monopsonist hiring only one variable input. If you want to maximize profits, you will purchase that variable input up to the point where the

• A) MRP curve for the input intersects the marginal cost curve for the input.
• B) cost of the input equals the profit generated by the employment of that input.
• C) demand curve intersects the supply curve of the input.
• D) marginal product of that input equals the price of one unit of the input.
• E) wage rate is the highest.