A Monopolist Produces a Good Using Only One Factor, Labor

question 5

Multiple Choice

A monopolist produces a good using only one factor, labor.There are constant returns to scale in production, and the demand for the monopolist's product is described by a downward-sloping straight line with slope 21.The monopolist faces a horizontal labor supply curve.If the monopolist chooses output to maximize profits, then the marginal

• A)cost of labor to the monopolist exceeds the wage.
• B)product of labor times the price of output equals the wage.
• C)product of labor times the price of output is less than the wage.
• D)product of labor times the price of output exceeds the wage.
• E)revenue product of labor is less than the wage.

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Definitions:

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