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:

Abstractness

A quality of being non-concrete or theoretical, representing ideas or concepts rather than physical realities.

Manufactured Item

A product that has been produced from raw materials through manual labor or machinery, often within an industrial or factory setting, designed for consumer use or further processing.

Clothing

Items worn on the body typically made from fabric, textiles, or animal skins, used for protection, modesty, and symbolic identification.

Hat

A head covering, often with a brim and sometimes signifying a particular role or status.