Monopsonistic exploitation occurs in any situation in which a factor of production is paid ______________ the value of its MRP.
A) the same as
B) less than
C) more than

Question

Quizplus · Accepted Answer

Monopsonistic exploitation occurs when a single buyer or employer has significant market power, allowing them to pay factors of production (such as labor) less than their marginal revenue product (MRP). This results in a lower wage or price for the factor of production than would exist in a competitive market. Therefore, the factor is paid less than its MRP.

Monopsonistic Exploitation Occurs in Any Situation in Which a Factor