The Figure Given Below Represents Equilibrium in the Labor Market

question 45

Multiple Choice

The figure given below represents equilibrium in the labor market with the demand and supply curves of labor.Figure 14.6
In the figure,
D = MRP implies demand for labor = Marginal Revenue Product
MFC represents Marginal Factor Cost curve
S represents the supply curve of labor

-Which of the following statements is not true?

• A)Assuming a perfectly competitive labor market, a firm selling in a monopolistic product market will have a lower marginal revenue product curve than a firm in a perfectly competitive product market.
• B)The intersection of market-labor supply with market-labor demand establishes equilibrium in a perfectly competitive labor market.
• C)In monopsonistic labor markets, an individual firm faces a positively sloped labor-supply curve.
• D)In a perfectly competitive labor market, an individual firm can hire as many workers as it needs at the equilibrium wage rate
• E)In a monopsonistic labor market, marginal revenue product is equal to the value of marginal product.

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Definitions:

Average Costs

The total costs divided by the quantity produced or consumed, indicating the cost per unit.

Transfer Prices

The prices at which services, goods, or capital are exchanged between departments or divisions within the same company or between subsidiaries.

Intermediate Products

Goods that are used as inputs in the production of other goods, not intended for final consumption.

Profit Center

A branch or division of a company that is directly responsible for generating its own revenue and profits.