Use the Figure Below to Answer the Following Questions

question 94

Multiple Choice

Use the figure below to answer the following questions.

Figure 18.3.1
-Refer to Figure 18.3.1. This figure shows the value of marginal product of labour curve, the labour supply curve, and the marginal cost of labour curve. If a union and the monopsonist in Figure 18.3.1 are equally strong, the outcome will be an hourly wage

• A)of $7.
• B)between $5 and $6.
• C)between $5 and $7.
• D)between $6 and $7.
• E)of $6

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Definitions:

Substitution Effect

The change in consumption patterns due to a change in the relative prices of goods, leading consumers to replace more expensive items with cheaper alternatives.

Margin

Margin refers to the difference between the selling price of a good or service and its cost of production, also used to describe profit margin or markup.

Total Revenue Product

The total revenue generated by a factor of production, calculated by multiplying the marginal product of the factor by the market price of the output.

Marginal Revenue Product

The additional revenue generated from utilizing one more unit of an input, like labor or capital.