Why Does the Monopsonist's Marginal Expenditure Curve Lie Above the Supply

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The Answer is A monopsonist in general cannot tell exactly which seller is willing to sell for how much. Thus the cost of purchasing a little more labor is to raise the wage rate for all workers. The cost of buying a little more (marginal expenditure) is thus higher than the cost of the additional purchases because the monopsonist must spend more on all previous workers as well as the new workers hired. Thus the marginal expenditure curve lies above the labor supply curve at any given quantity of labor.

Why Does the Monopsonist's Marginal Expenditure Curve Lie Above the Supply

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