MARGINAL FACTOR COST CURVE, MONOPSONY: A curve that graphically represents the relation between marginal factor cost incurred by a monopsony for hiring an input and the quantity of input employed. A profit-maximizing monopsony hires the quantity of input found at the intersection of the marginal factor cost curve and marginal revenue product curve. The marginal factor cost curve for a monopsony with market control is positively sloped and lies above the average factor cost curve.

     See also | marginal factor cost | marginal factor cost curve | marginal factor cost curve, perfect competition | total factor cost curve | average factor cost curve | total cost | total product | marginal factor cost, perfect competition | marginal factor cost, monopsony |

MARGINAL FACTOR COST CURVE, MONOPSONY, AmosWEB GLOSS*arama, http://www.AmosWEB.com, AmosWEB LLC, 2000-2024. [Accessed: April 26, 2024].

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The proportion of each additional dollar of household income that is used for consumption expenditures. The marginal propensity to consume (abbreviated MPC) is another term for the slope of the consumption line and is calculated as the change in consumption divided by the change in income. The MPC plays a central role in Keynesian economics. It quantifies the consumption-income relation and the fundamental psychological law. It is also a foundation for the slope of the aggregate expenditures line and is critical to the multiplier process. A related consumption measure is the average propensity to consume.

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