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Asked by Miladis Rivas on May 07, 2024

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The monopsonist in a nonunionized labor market pays a wage rate below the MRP of labor.

Monopsonist

A market condition where there is only one buyer in the market, giving the buyer significant power over sellers in terms of price and terms.

MRP

MRP stands for Marginal Revenue Product, which is the additional revenue generated from employing one more unit of a factor of production, such as labor or capital.

Nonunionized

Workplaces or employees that are not part of a labor union and do not engage in collective bargaining.

  • Understand the dynamics of wages determination in different market conditions, including monopsonistic and unionized environments.
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IL
Isaac LoyalMay 09, 2024
Final Answer :
True
Explanation :
A monopsonist has market power as the single buyer of labor in a particular market. In a nonunionized labor market, the monopsonist can pay a lower wage rate than what would be paid in a competitive labor market, resulting in a wage rate below the marginal revenue product (MRP) of labor.

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