Question6 1 pts Which of the following microeconomic tools a

Question6 1 pts Which of the following microeconomic tools aids monopsony employers in identifying the required wage level? O MRP-LD MR = MC MRPL- MEL

Solution

Correct option is (3).

A monopsonist, 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.