Schleppsi, a Soft Drink Maker, Is a Monopsonist in the County

question 198

Multiple Choice

Schleppsi, a soft drink maker, is a monopsonist in the county where it manufactures all of the Diet Schleppsi it produces. Suppose the current daily labor cost to the firm is $35,000 with 99 workers and the total wage cost with 100 workers would be $36,000. What will the market wage be if Schleppsi hires the 100th worker?

• A) $35.
• B) $36.
• C) $100.
• D) $350.
• E) $360.

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Definitions:

Equilibrium Level

The state in a market where supply equals demand, and there are no external forces causing disruption, leading to a stable price.

Unconscionable Rate

A term often used to describe exorbitantly high rates or charges that go beyond what is reasonable or legally permissible, typically in the context of loans or credit.

Exorbitant Rate

An excessively high and unreasonable rate, often used in reference to interest rates or prices.

Equilibrium Price

The price at which the quantity of a good or service demanded equals the quantity supplied, meaning there is no excess supply or demand.