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What is the marginal cost of employment if the monopsonist is a nondiscriminating one?

What is the marginal cost of employment if the monopsonist is a nondiscriminating one?

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Answer #1

A non discriminating monopsonist is one who pays same wage to all its labor (hence, does not discriminate).

The nondiscriminating monopsonist hires up to the point where MC= VMP (Value of Marginal Product). So, for a nondiscriminating monopsonist, the MC of employment is equal to the value of marginal product, which itself is equal to marginal revenue. This is shown below-

A nondiscriminating monopsonist pays the same wage to all workers. The marginal cost of hiring exceeds the wage, and the marginal cost curve lies above the supply curve. Profit maximisation occurs at point A; the monopsonist hires EM workers and pays them a wage of wM

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