A Monopsonist Will Hire Labor Up to the Point Where

question 30

Multiple Choice

A monopsonist will hire labor up to the point where

• A)the marginal expense of labor is minimized.
• B)the marginal physical productivity of labor is maximized.
• C)the marginal expense of labor is equal to marginal revenue.
• D)the marginal expense of labor is equal to the marginal value product of labor.

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Definitions:

Indirect Costs

Expenses that are not directly traceable to a particular project, product, or activity; typically general overhead costs such as administrative expenses and utilities.

Fixed Costs

Fixed expenses in a business are constant costs that do not fluctuate with changes in production or sales volume, like salaries or rent.

Period Costs

Expenses that are not directly tied to the production of goods and are expensed in the period in which they are incurred.

Conversion Costs

Expenses directly related to the conversion of raw materials into finished goods, including labor and overhead.