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Masja [62]
3 years ago
12

Explain why the monopsonist's marginal-revenue-product curve is downward sloping. Include the role of the price for the final go

od or service in your answer.
Business
1 answer:
alekssr [168]3 years ago
3 0

Answer:

A monopsony is market where there is only one buyer, e.g. the government is the sole buyer for nuclear submarines in the US.

The demand curve of a monopsony is similar to the demand curve of any other type of market, i.e. it is downward sloping. Since there is only 1 buyer, the demand curve is also the supply curve. If the monopsonist wants to increase the quantity demanded at a lower price, the supplier (or suppliers) must be able to lower its costs and that generally results in lower labor costs.

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