Asked by Anh Thy Nguy?n Ng?c on Jun 08, 2024
Verified
A monopsonist in the labor market tends to hire more workers than would be hired if the labor market were purely competitive.
Monopsonist
An economic situation where there is only one buyer in the market, giving the buyer substantial power over prices and terms with suppliers.
Purely Competitive
A market structure characterized by many buyers and sellers, all of whom have little to no influence on the market price of goods and services.
- Distinguish between various market structures such as monopolies and monopsonies and their impact on the labor market.
Verified Answer
SC
Simone CastroJun 12, 2024
Final Answer :
False
Explanation :
A monopsonist, being the sole buyer of labor, has market power that allows it to set wages lower than in a competitive market, leading to hiring fewer workers than would be hired in a competitive labor market.
Learning Objectives
- Distinguish between various market structures such as monopolies and monopsonies and their impact on the labor market.