A Firm That Was Initially a Monopsonist but Has to Buy

question 25

Multiple Choice

A firm that was initially a monopsonist but has to buy from a competitive resource market all of a sudden will:

• A)buy more amount of resources and pay a higher price for these resources.
• B)buy the same amount of resources and pay a higher price for these resources.
• C)buy less amount of resources and pay a lower price for these resources.
• D)buy less amount of resources and pay a higher price for these resources.
• E)buy more amount of resources and pay a lower price for these resources.

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Definitions:

Bus Ticket

A document or electronic confirmation that permits a person to travel on a bus.

Comparative Advantage

is the ability of an entity to produce a good or service at a lower opportunity cost than others, leading to trade benefits.

Opportunity Cost

Overlooking potential advantages by settling on a single alternative.

Sandwiches

A food item typically consisting of two pieces of bread with meat, cheese, vegetables, or other fillings between them.