A Perfectly Discriminating Monopsonist Pays Each Worker His or Her

question 28

Multiple Choice

A perfectly discriminating monopsonist pays each worker his or her reservation wage. This results in

• A) the firm receiving zero profit.
• B) the firm substituting capital for labor.
• C) the firm receiving all of the surplus.
• D) the firm avoiding payroll taxes.
• E) workers being unwilling to work at the offered wage.

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Definitions:

Commitment

Commitment pertains to the state of being dedicated to a cause, activity, or job, showing a willingness to give time and energy to something believed in.

Competence

The ability to do something successfully or efficiently, often referring to a specific skill set or knowledge.

Contingency Approach

A management theory that suggests the optimal course of action depends on specific internal and external situations, advocating for flexibility and adaptation in strategies.

Situational Forces

External or internal factors that influence individuals' behavior or the outcome of events within an organizational or social context.