If a Firm Is a Monopsonist in the Hiring of Both

question 165

Multiple Choice

If a firm is a monopsonist in the hiring of both labor and capital, it will obtain the profit-maximizing quantities of labor and capital when

• A)\(\mathrm{MRP} _{L} / P_{L}=\mathrm{MRP} C / P C=1\)
• B)\(\mathrm{MRP}_{L} / \mathrm{MRC} L=\mathrm{MRP}_{C} / \mathrm{MRC} _{C}=1 .\)
• C) the MRP of labor equals the MRP of capital.
• D) the MRC of labor equals the MRC of capital.

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Definitions:

Break Even

The point at which total costs and total revenue are equal, resulting in no net loss or gain.

Fixed Costs

Expenses that do not change with the volume of production or sales, such as rent or salaries.

Technology A

Refers to a generic term used to describe a specific technology, typically when comparing it to another technology (e.g., Technology B).

Break Even

The point at which total costs and total revenues are equal, resulting in no profit or loss for a business.