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AP® Microeconomics

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Moderate

Factor Markets: Perfect Competition vs. Monopsony

APMICR-NEJLMG

If everything else is equal, which of the following is TRUE of the equilibrium quantity and wage for firms in a perfectly competitive resource market as compared to a monopsony?

A

The monopsony will pay a higher wage and hire more workers.

B

The perfect competitor will pay a higher wage and hire more workers.

C

The monopsonist will pay a higher wage but hire fewer workers.

D

The perfect competitor will pay a higher wage but hire fewer workers.

E

The monopsonist will pay the same wage but hire fewer workers.