Other things equal, the monopsonistic employer will pay a a. lower wage rate and hire fewer workers than will a purely competitive employer. b. higher wage rate but hire fewer workers than will a purely competitive employer. c. lower wage rate but hire a larger number of workers than will a purely competitive employer. d. higher wage rate and hire a larger number of workers than will a purely competitive employer.

a. lower wage rate and hire fewer workers than will a purely competitive employer.

A monopsonistic employer refers to a market situation where there is only one buyer for labor—the employer. In such a market, the employer has market power and can influence the wage rates because workers have fewer alternatives. As a result, the monopsonistic employer will take advantage of this power by paying lower wages, since they are not competing against other employers for labor. Moreover, they will hire fewer workers compared to what would happen in a purely competitive labor market where there are many employers and neither the employers nor the workers can influence the wage rate.

In a purely competitive market, wage rates are determined by the intersection of supply and demand for labor. Employers in such a market are wage takers, meaning they have no power to set wages below the market level because workers could easily find employment elsewhere for a better wage. Thus, in a competitive market, wages are typically higher and more workers are employed as compared to a monopsonistic market.

Extra: The concept of monopsony in labor markets is an important one in economic theory concerning market structures. It illustrates the imbalance that can occur when there is only one, or a limited number of, buyers (employers) in the market. One of the implications of monopsony is reduced market efficiency. Because monopsonistic employers hire fewer workers than in a competitive market, there is potential labor that is not being utilized, which can lead to a loss of economic welfare. Additionally, the lower wages can decrease the overall purchasing power of the workforce, leading to adverse effects on the broader economy. It's also worth noting that monopsony is not limited to labor markets; it can occur in any market where there is a single buyer for any type of good or service.