The Main Difference Between a Monopsonist and a Competitive Buyer

question 245

Multiple Choice

The main difference between a monopsonist and a competitive buyer of labor is that

• A) the monopsonist can hire as many workers as it wants at the going wage while the competitive firm must raise wages to hire additional workers.
• B) the competitive firm can hire as many workers as it wants at the going wage while the monopsonist can hire more workers at lower wages.
• C) the competitor can hire as many workers as it wants at the going wage while the monopsonist must raise wages to hire additional workers.
• D) the monopsonist can force wages down and still hire as many workers as it wants while the competitive firm must increase the wage rate to hire additional workers.

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Definitions:

Voting Stock

Shares that give the stockholder the right to vote on matters of corporate policy making and the election of the board of directors.

Fair Value

The price at which an asset or liability could be exchanged between knowledgeable, willing parties in an arm's length transaction.

Fair Value Method

An accounting approach that assesses and assigns a price to a company's assets and liabilities based on current market value.