Which of the following microeconomic tools aids monopsony em

Which of the following microeconomic tools aids monopsony employers in identifying the required wage level?

Solution

Solution:-

Correct option is (2). MR = MC

A monopolist, being the single buyer in labor market, maximizes profit and optimizes hiring by equating marginal revenue product of labor (MRPL) with marginal expense of labor (MEL).

Note that MR = MC is the profit-maximizing condition for firms that are not perfectly competitive.