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:

Production Possibilities Curve

A graph that shows the various combinations of outputs that an economy can produce, given resources and technology.

Basic Decisions

Fundamental choices or determinations made by individuals or organizations that dictate behavior and actions, often shaping future outcomes.

Economies

A system of production, distribution, and consumption of goods and services in an area or country.

Production Possibilities Curve

A graphical representation showing the maximum quantity of goods or services that can be produced with limited resources.