Which of the following statements is false?
A)For the monopsonist, marginal factor cost decreases as it buys additional units of a factor.
B)For the monopsonist, the supply curve of the factor it buys is different from the marginal factor cost curve.
C)The monopsonist buys that quantity of a factor at which marginal revenue product equals marginal factor cost.
D)The monopsonist pays its factors a dollar amount less than its marginal factor cost.

Question

Quizplus · Accepted Answer

For a monopsonist, the marginal factor cost (MFC) increases as it buys additional units of a factor, not decreases. This is because a monopsonist faces an upward-sloping supply curve for the factor of production it buys, meaning it must pay a higher price for each additional unit of the factor.

Which of the Following Statements Is False