If the labor market is competitive,a monopoly output market will result in
A) a lower wage than that of a competitive output market.
B) a higher wage than that of a competitive output market.
C) less labor hired than in a competitive output market.
D) more labor hired than in a competitive output market.

Question

Quizplus · Accepted Answer

In a monopoly output market, the firm has market power and can set the quantity of output at a level that maximizes profits. This means they will hire less labor than in a competitive output market where they have to price and produce at a level determined by market forces. With less labor hired, there will be a lower demand for labor, resulting in a lower wage. Therefore, the correct answer is C.

If the Labor Market Is Competitive,a Monopoly Output Market Will