For a Monopsonist the Marginal Cost of Increasing Its Workforce

question 38

Multiple Choice

For a monopsonist the marginal cost of increasing its workforce will always be greater than the wage rate because

• A) there is not good factor substitution in a monopsony.
• B) the wage rate offered the newest employee must be paid to all workers.
• C) the industry will be a closed shop.
• D) a normal rate of return must be paid to the owner.

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Definitions:

Portfolio

In finance, a collection of investments.

Projects

Individual or collaborative efforts undertaken to achieve a specific goal within a certain timeframe.

Monte Carlo Simulation

A computational technique that utilizes random sampling and statistical modeling to estimate mathematical functions and mimic the operation of complex systems.

Probability Distributions

A mathematical function that outlines every potential value and their probabilities that a random variable might assume across a specified spectrum.