A Profit- Maximizing Monopsonist in a Labour Market Will Continue

question 73

Multiple Choice

A profit- maximizing monopsonist in a labour market will continue to hire labour until the

• A) marginal cost of labour equals its average revenue.
• B) hourly wage of the labour is equated with its average cost.
• C) marginal revenue product of labour equals its marginal cost.
• D) hourly wage of the labour is equated with its marginal cost.
• E) marginal product of labour is maximized.

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Definitions:

Homemade Leverage

A strategy where investors adjust the amount of leverage in their own portfolios by borrowing or lending money to replicate corporate financial leverage.

Capital Structure

This term relates to the way a corporation finances its operations and growth by using different sources of funds, such as debt, equity, and hybrid securities.

Debt-Equity Ratio

A measure of a company's financial leverage calculated by dividing its total liabilities by shareholders' equity, indicating the extent to which debt is used to finance the company's assets.