The figure shows a graph whose horizontal axis is labeled Nu…
The figure shows a graph whose horizontal axis is labeled Number of Workers and the vertical axis is labeled Wage Rate in dollars. The intersection of the horizontal and vertical axis is zero. Three numbers appear on the horizontal axis and are, from left to right, five, ten, and fourteen. Five numbers appear on the vertical axis, and are, from bottom to top, ten, twenty, twenty four, thirty, and thirty seven point five. The graph has 3 lines. One line slopes down and to the right and is labeled Demand. It begins slightly to the right of the vertical axis and above the wage rate of thirty seven point five dollars. The line passes through the coordinates five workers and thirty seven point five dollars, then intersects the line labeled Marginal Factor Cost at coordinates ten workers and thirty dollars. The Demand line continues on and intersects the line labeled Supply at coordinates fourteen workers and twenty four dollars. It ends above the horizontal axis and far to the right of fourteen workers. An upward sloping line labeled Marginal Factor Cost begins on the vertical axis at a wage rate of ten dollars and moves up and to the right. The line passes through coordinates, five workers and twenty dollars, then intersects with the downward-sloping Demand line at coordinates ten workers and thirty dollars, and continues on through coordinates fourteen workers and thirty seven point five dollars. An upward sloping line labeled Supply also begins at the same point on the vertical axis at a wage rate of ten dollars. The Supply line moves up and to the right, but it remains under the Marginal Factor Cost line, increasing in distance from that line as it moves right. The line moves through coordinates ten workers and twenty dollars, then intersects the downward-sloping Demand line at coordinates fourteen workers and twenty four dollars and continues on. The graph above shows the conditions that a monopsonist faces in a labor market. How many workers would this monopsonist hire and what wage rate would it pay?
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