Which of the Following Statements Regarding Monopsony Is False

question 16

Multiple Choice

Which of the following statements regarding monopsony is false?

• A) A monopsonist faces no constraints as it sets wages.
• B) Monopsony is more likely in situations of unskilled labour.
• C) A monopsonist is likely to lose some of its market power in the long run.
• D) A monopsonist is likely to face a fairly inelastic supply of labour.
• E) Monopsony is more likely in situations of immobile labour.

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Definitions:

Opportunity Cost

Opportunity Cost is the foregone benefit that would have been derived by choosing the next best alternative when making a decision.

Marginal Analysis

An examination of the added benefits of an activity compared to the added costs incurred by that same activity.

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Total Profit

The total income a business earns after subtracting all expenses and costs associated with its operations.