Viewed as a monopsony employer of sports talent, a sports organization a. pays a

Question

Viewed as a monopsony employer of sports talent, a sports organization
    a.    pays a constant wage (salary) at all possible levels of employment
    b.    exhibits a demand for sports talent that is flat
    c.    incurs marginal labor costs that exceed the wage (salary)
    d.    employs sports talent where the market labor supply curve intersects the marginal cost of labor curve

In the mid-1990s, the New York Rangers hockey franchise

    a.    had a smaller player payroll than the New York Islanders franchise
    b.    earned approximately half as much in home gate receipts as the New York Islanders franchise
    c.    had a larger player payroll than the New York Islanders franchise
    d.    had a smaller player payroll than home gate receipts, whereas the New York Islanders exhibited the opposite

For a given sports organization in the short run,
    a.    marginal cost equals 0
    b.    TC = TVC - TFC
    c.    total costs consist only of fixed costs
    d.    TC = TFC + TVC

Explanation / Answer

1)The correct option is C. This is because in monopsony, there is one buyer and one supplier of labour. Thus in this case the equilibrium is not at the intersection of the labour demand and supply curve but the wage is higher than the marginal cost wage rate.

2. Doesn't have knowledge to answer this.

3. The correct option is D. Total cost equals Total fixed cost TFC and total Variable cost. TVC

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