Unformatted text preview: them), it must offer the higher $20 wage to its two current employees. Hence, the monopsonist's costs from hiring the third worker are $60 (3 × $20), and the marginal cost from hiring the third worker is $30 ($60 − $30). The marginal cost of $30 exceeds the new market wage of $20 because the monopsonist must also pay its two current employees an hourly wage that is $5 higher than before....
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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