Question

Monopsonistic exploitation is A. the difference between the number of workers employed by a competitive firm and those employed by a monopsonist. B. the difference between the marginal revenue product of labor and the wage paid by the monopsonist. C. equal to the marginal factor cost of the monopsonist. D. the difference between the monopsony wage and the competitive wage.

Answer 1

Monopsonistic exploitation occurs in a labor market with a single employer, resulting in lower employment and wages compared to a competitive labor market.

Step-by-step explanation:

Monopsonistic exploitation refers to the lower level of employment and lower equilibrium wage that occurs in a labor market where there is only one employer, known as a monopsonist. The monopsonist has the power to set the wage it pays to workers but is constrained by the market supply of labor. To maximize profits, a monopsonist hires workers up to the point where the marginal cost of labor equals their labor demand. This results in a lower employment level compared to a competitive labor market, where multiple employers exist.

Learn more about Monopsonistic exploitation here:

Answer 2

B. the difference between the marginal revenue product of labor and the wage paid by the monopsonist.

Step-by-step explanation:

An employee can be defined as an individual who is employed by an employer of labor to perform specific tasks, duties or functions in an organization.

Basically, an employee is saddled with the responsibility of providing specific services to the organization or company where he is currently employed while being paid a certain amount of money hourly, daily, weekly, or monthly depending on the contractual agreement between the two parties (employer and employee).

Hence, while an employer may be the owner of a business firm or company, an employee is a subordinate employed to provide unwavering services to the employer while also, being professional and diligent at all times.

Monopsony involves a situation in which an employer has numerous employees who are seeking to gain employment. Thus, this phenomenon avails employers the ability or opportunity to take undue advantage of the employees through exploitations by setting lower wages while employing fewer employees or workers.

Hence, monopsonistic exploitation is the difference between the marginal revenue product of labor and the wage paid by the monopsonist.