A. Assume that a large firm buys all the farms in northern Florida and becomes the only employer of farm workers in the northern half of the state.
- Explain how the competitive labor market functioned before the buyout of the independent farms. How was the wage rate and quantity of workers employed in the market determined?
- What will happen to the wage rate and employment of farm workers after the industry becomes monopsonistic? Illustrate your answer with an appropriate graph.
- What is MRC? Why is MRC a part of the monopsony graph and not a part of the perfectly competitive labor market graph?