Question

Two employers pay a wage of $10 an hour. Employer A is a monopsony while Employer B hires in a competitive labor market. Both firms sell their output in competitive markets. Which of the following will be true? The marginal worker in both firms will add the same to the firm's revenue. It will cost employer A more to hire another worker. Employer A has a higher average wage cost per worker than Employer B. If a worker left employer A and joined employer B, the economy would be better off.

Answer 1

Answer:

It will cost employer A more to hire another worker