The Main Difference Between a Monopsonist and a Competitive Buyer

question 245

Multiple Choice

The main difference between a monopsonist and a competitive buyer of labor is that

• A) the monopsonist can hire as many workers as it wants at the going wage while the competitive firm must raise wages to hire additional workers.
• B) the competitive firm can hire as many workers as it wants at the going wage while the monopsonist can hire more workers at lower wages.
• C) the competitor can hire as many workers as it wants at the going wage while the monopsonist must raise wages to hire additional workers.
• D) the monopsonist can force wages down and still hire as many workers as it wants while the competitive firm must increase the wage rate to hire additional workers.

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Definitions:

Product Costs

All costs that are involved in acquiring or making a product. In the case of manufactured goods, these costs consist of direct materials, direct labor, and manufacturing overhead. Also see Inventoriable costs.

Absorption Costing

A costing method that includes all manufacturing costs—direct materials, direct labor, and both variable and fixed manufacturing overhead—in unit product costs.

Manufacturing Costs

The total expense involved in the manufacture of a product, including direct materials, direct labor, and manufacturing overhead.

Product Costs

Costs that are directly attributable to the creation of products including direct labor, direct materials, and manufacturing overhead.