Use the Following to Answer Question(s): Minimum Wage and Monopsony

question 1

Multiple Choice

Use the following to answer question(s) : Minimum Wage and Monopsony

-(Exhibit: Minimum Wage and Monopsony) With or without a minimum wage in its factor market, a profit-maximizing monopsony firm should always hire the quantity of a factor where:

• A) the wage rate is at a minimum.
• B) the wage rate equals marginal factor cost.
• C) MFC = MRP.
• D) All of the above are true, since they all state essentially the same rule.

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Definitions:

Cost Flow Assumptions

An accounting method that determines the cost of goods sold and ending inventory based on the presumed flow of inventory costs.

Cost-to-Retail Ratio

A method used in retail to calculate the cost of goods sold based on the ratio of the cost of goods available for sale to the retail price of the goods.

Retail Inventory Method

An accounting method used by retailers to estimate inventory levels by incorporating the cost to retail price ratio.

Sales Discounts

Reductions in the price of goods or services offered to customers, typically as an incentive to encourage prompt payment.