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Unformatted text preview: the wage that it pays to all of its workers, including those whom it currently employs. The monopsonist's marginal cost of hiring an additional worker, therefore, will not be equal to the wage paid to that worker because the monopsonist will have to increase the wage that it pays to all of its workers. A numerical example of a monopsony market is provided in Table 1 . The first two columns provide data on the market supply of labor that the monopsonist faces. The third column reports the total cost to the monopsonist of hiring each worker, which is just the wage times the number of workers. The fourth column reports the marginal cost of labor, which is the change in monopsonist's total cost of labor as it hires additional workers....
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This note was uploaded on 11/19/2011 for the course ECO 1310 taught by Professor Staff during the Fall '10 term at Texas State.
- Fall '10