Asked by Bridget Stokes on May 07, 2024
Verified
Other things equal,the monopsonistic employer will pay a:
A) lower wage rate and hire fewer workers than will a purely competitive employer.
B) higher wage rate but hire fewer workers than will a purely competitive employer.
C) lower wage rate but hire a larger number of workers than will a purely competitive employer.
D) higher wage rate and hire a larger number of workers than will a purely competitive employer.
Monopsonistic Employer
An employer with significant market power in hiring, enabling it to set wages below competitive levels.
- Explore the ramifications of monopsony on remuneration levels and the volume of jobs.
Verified Answer
JL
Juliette LezakMay 10, 2024
Final Answer :
A
Explanation :
A monopsonistic employer has market power in the labor market and can therefore hire fewer workers at a lower wage rate. In contrast, a purely competitive employer must offer a higher wage rate in order to attract enough workers to meet their demand.
Learning Objectives
- Explore the ramifications of monopsony on remuneration levels and the volume of jobs.