The labour supply curve facing a monopsonist is positively sloped because:
A)the monopsonist must pay a higher wage if it wishes to attract more labour.
B)these workers are scarce and drive up the wage rate.
C)government intervenes in the labour market.
D)the monopsonist only hires skilled labour.

Question

Quizplus · Accepted Answer

The monopsonist has market power and is the sole buyer of labor in the market. As such, if it wants to hire additional workers, it must offer a higher wage rate to entice them to work. This results in a positively sloped labor supply curve, where more workers are willing to work at higher wages.

The Labour Supply Curve Facing a Monopsonist Is Positively Sloped