Consider an Employer That Is a Monopolist in Its Product

question 49

Multiple Choice

Consider an employer that is a monopolist in its product market versus an otherwise comparable employer that is a competitor in its product market.A wage increase will have

• A) a comparatively larger effect on employment of the monopolist because the monopolist is the only seller of the good.
• B) no effect on employment of the monopolist because the monopolist will simply pass the increase in wage cost on to consumers by charging a higher price.
• C) the same effect on employment because the profit maximization condition is MRP = MEL whether the firm is a monopolist or whether it is competitive in the product market.
• D) a comparatively smaller effect on employment of the monopolist because the monopolist will be able to pass some of the increase in wage cost on to consumers by charging a higher price.

Comprehend the concepts of marginalism and its relevance in economic decisions.

Understand the diverse educational and skill needs of entrepreneurs.

Recognize the myths and realities of entrepreneurship.

Identify the reasons behind new business failures and strategies for prevention.

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Definitions:

Economic Policies

Strategies and decisions by governments concerning the monetary system, taxation, market regulations, and public spending to influence the economy.

Goods And Services

The output of an economy that is provided to consumers, including tangible products (goods) and intangible items (services).

Entrepreneurial Ability

The skill or talent that an entrepreneur possesses to organize resources effectively, take risks, innovate, and create economic value.

Urbanization

The process through which cities grow, and higher percentages of the population come to live in urban areas.