If a monopsony labor market suddenly were transformed into a perfectly competitive labor market, how would the wage and employment change?
A.
Both would increase.
B.
Both would decrease.
C.
The wage would remain constant, but employment would increase.
D.
The wage would fall, but employment would increase.
E.
The wage would rise, but employment would decrease.
Exam No： AP Micro Practice Test 4 Year：2024 Question No：48
Answer:
A
Knowledge points:
5.1 Introduction to Factor Markets
5.3 Profit-Maximizing Behavior in Perfectly Competitive Factor Markets
5.4 Monopsonistic Markets
Solution:
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