Question

Two employers, A and B, pay the same wage but Employer A faces a more inelastic supply curve of labor than Employer B. Both firms are monopsonies but have similar outputs and technologies. Other things being the same, then in the long run?

A.) Both employers will employ the same amount of capital.
B.) Employer A will employ more capital than Employer B.
C.) Employer A will employ less capital than Employer B.

Answer 1

B.) Employer A will employ more capital than Employer B.

Step-by-step explanation: