A firm that is a monopolist in the output market and a monopsonist in the input market
A) will hire the same amount of labor as if perfect competition prevailed in both markets, but pay a lower wage.
B) will restrict the level of output but not that of employment compared to the perfectly competitive case.
C) will hire less labor but pay the same wage compared to the perfectly competitive case.
D) will hire less labor and pay a lower wage compared to the perfectly competitive case.
Answer: D
You might also like to view...
If a firm sells 10 units of output at $100 per unit and 11 units of output when price is reduced to $99, its marginal revenue for the last unit sold is
A) $11. B) $99. C) $109. D) $89.
If the marginal tax rate is too high, it can cause all of the following except
A. Government tax receipts to decline. B. Work effort to decrease. C. Businesses to produce more. D. The rate of saving to decline.