PLABORМIC$7.00-S$5.25$4.50MVPQLABOR10001500 What is the equilibrium quantity of input used and what is the price paid per unit under the condition ofmonopsony?a. QLabor 1000b. QLabor 1000c. QLabor 1500d. can't tell; insufficient informationPLabor $4.50PLabor $7.00PLabor $5.25

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Asked Nov 5, 2019
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PLABOR
МIC
$7.00
-S
$5.25
$4.50
MVP
QLABOR
1000
1500
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PLABOR МIC $7.00 -S $5.25 $4.50 MVP QLABOR 1000 1500

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What is the equilibrium quantity of input used and what is the price paid per unit under the condition of
monopsony?
a. QLabor 1000
b. QLabor 1000
c. QLabor 1500
d. can't tell; insufficient information
PLabor $4.50
PLabor $7.00
PLabor $5.25
help_outline

Image Transcriptionclose

What is the equilibrium quantity of input used and what is the price paid per unit under the condition of monopsony? a. QLabor 1000 b. QLabor 1000 c. QLabor 1500 d. can't tell; insufficient information PLabor $4.50 PLabor $7.00 PLabor $5.25

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Expert Answer

Step 1

The monopsony is a market structure which is characterized by the presence of a single buyer in the market. Thus, even though there are many sellers selling the differentiated commodities or anything, there will be only a single seller to demand the commodity in the market.

Step 2

Under the monopsony market, the quantity of labor will be determined by the firm at the intersection of the Marginal Input Cost curve and the Marginal Value Product curve of the labor. From the figure, it is identified ...

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