The optimal level of employment for a monopsonist is set at the point where the A)Wage rate equals the VMP_L B)Wage rate equals the marginal factor cost C)Marginal factor cost equal to the MRP_L D)Supply of labor equals the marginal factor cost

Question

Quizplus · Accepted Answer

A monopsonist sets the optimal level of employment where the marginal factor cost (MFC) equals the marginal revenue product of labor (MRP_L), as this is the point where the additional cost of hiring one more worker equals the additional revenue generated by that worker.

The Optimal Level of Employment for a Monopsonist Is Set