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Factor Markets: Monopsony MRC Curve

APMICR-KLOEBL

Which of the following is true of the graph for a monopsonistic factor (resource) market?

A

The MRC curve is below the supply curve because the firm sacrifices revenue when it lowers the price of its product.

B

The MRC curve is above the supply curve because the firm has to increase wages in order to attract additional workers.

C

The MRC curve is below the supply curve because additional workers are willing to work for a lower wage.

D

The MRC curve is above the supply curve because the firm is able to raise the price of its product when it hires more workers.

E

The MRC curve is equal to the supply curve.