Which of the Following Statements Regarding Monopsony Is False

question 34

Multiple Choice

Which of the following statements regarding monopsony is false?

• A) A perfectly discriminating monopsonist will hire the same number of workers as a firm which is a perfect competitor in the labour market.
• B) A monopsonist can lower the wages that it pays without losing its entire labour force.
• C) A perfectly discriminating monopsonist pays all of its workers less than the wage that would prevail in a perfectly competitive labour market.
• D) The monopsonist earns a profit because it earns economic rents for all the hired workers.
• E) A firm operating in a perfectly competitive labour market cannot lower the wage that it pays without losing some of its workforce.