The Marginal Factor Cost Curve for a Monopsonist Is

question 124

Multiple Choice

The marginal factor cost curve for a monopsonist is:

• A) upward sloping, unlike the horizontal curve for a firm buying factors of production in a perfectly competitive factor market.
• B) upward sloping, the same as that for a firm buying factors of production in a perfectly competitive factor market.
• C) downward sloping, unlike the horizontal curve for a firm buying factors of production in a perfectly competitive factor market.
• D) horizontal, the same as that for a firm buying factors of production in a perfectly competitive factor market.

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Definitions:

Entry Barriers

Obstacles that prevent or hinder new competitors from easily entering an industry or area of business.

Competitive Price-Searcher

A market characteristic where firms actively seek to set prices competitively, often through differentiation, to attract customers.

Long-Run Equilibrium

A state in which all firms in a market are making just enough profit to stay in business, with no incentive for new firms to enter or existing firms to exit.

Price Taker

A market participant that accepts the market price as given and has no influence to alter the price of the good or service they buy or sell.