What is the amount of monopsonistic exploitation that takes place at the firm examined in Problem ?

Marginal costs are supported production expenses that are variable or direct – labor, materials, and equipment, as an example – and not fixed costs the company will have whether it increases production concerned. Fixed costs might include administrative overhead and marketing efforts – expenses that are the identical regardless of what percentage pieces are produced.

The marginal revenue product and marginal physical cost is measuredto hunt out out the profit maximizing equilibrium level.

The marginal fixed charge equal marginal revenue product at $\$6$and also the wage rate paid by the employer islocalid="1653279116943" $\$6$.
As a result, the disparity from marketing pay level ratio and retail level compensation proportion The predominant the expense of either the commanding managed dominant position and indeed the wage which that firm would pay reflected accordingly. As indicated within the above figure, $\$10$is that the amount of monopolistic exploitation.