To maximize profits, a monopsonist will hire the
quantity of labor to the point where the marginal
factor cost is equal to
a. marginal physical product.
b. marginal revenue product.
c. total revenue product.
d. any of the above.
Q409: BigBiz, a local monopsonist, currently hires 50
workers and pays them $6 per hour. To attract an
additional worker to its labor force, BigBiz would
have to raise the wage rate to $6.25 per hour.
What is BigBiz’s marginal factor cost?
a. $6.25 per hour
b. $12.50 per hour
c. $18.75 per hour
d. $20.00 per hour