The cost of producing an additional unit of a good or service that falls on people other than the producer is
A) the marginal cost.
B) represented by the demand curve.
C) represented by the supply curve.
D) the marginal external cost.
E) the marginal social cost.
D
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Firm A is a monopsonist that faces a labor supply elasticity of 2.4 whereas Firm B is a monopsonist that faces a labor supply elasticity of 1.4. Which of these monopsonists has a higher markup over wage?
A) Firm A B) Firm B C) They both pay the same. D) It is impossible to tell which pays a higher wage.
The model of perfect competition is most likely to apply to a market where
a. it is difficult for existing firms to exit the market b. there are a few buyers, and they are uninformed about the degree of product standardization c. there are many existing sellers, but it is difficult for new sellers to enter the market d. one dominant seller must negotiate with one dominant buyer e. there are many sellers, and they produce a standardized product