Google
Monday 
October 15, 2018 

AmosWEB means Economics with a Touch of Whimsy!

AmosWEBWEB*pediaGLOSS*aramaECON*worldCLASS*portalQUIZ*tasticPED GuideXtra CrediteTutorA*PLS
HARD MONEY: Historically money that is in the form of precious metals, especially gold. In modern times, any national currency that is expected to retain its value (and even appreciate in value), and is readily acceptable for most international transactions. The U.S. dollar, German marc, and Swiss franc tend to be near the top of the list of hard money (also termed hard currency).

Visit the GLOSS*arama


TOTAL FACTOR COST CURVE, MONOPSONY:

A curve that graphically represents the relation between total factor cost incurred by a monopsony when using a given factor of production to produce a good or service. The total factor cost curve is most important in factor market analysis for the derivation of the marginal factor cost curve.
Monopsony is a market structure with a single buyer or in terms of factor markets, a single employer. This means that monopsony is a price maker, with control over the buying side of the market. Market control means monopsony faces a positively-sloped supply curve. To buy a larger quantity, it must pay a higher price.

The total factor cost curve reflects the degree of market control held by a firm. For a perfectly competitive firm with no market control hiring inputs under perfect competition, the total factor cost curve is a straight line that emerges from the origin. For firms with market control, including monopsony, oligopsony, or monopsonistic competition, the total factor cost curve increases at an increasing rate. The shape of the total factor cost curve thus indicates the degree of market control possessed by the factor buyer.

Total Factor Cost Curve,
Monopsony
Total Factor Cost Curve, Monopsony
The exhibit to the right displays the total factor cost curve for a hypothetical firm, OmniKing Island Resort. This firm is the only employer of labor on a small tropical island. As the only employer of labor on the island, OmniKing is a monopsony with extensive market control, and it faces a positively-sloped supply curve. To employ more workers, OmniKing must pay a higher price.

The vertical axis measures total factor cost and the horizontal axis measures the quantity of input (workers). Although quantity on this particular graph stops at 10 workers, it could go higher.

This curve indicates that if OmniKing hires 1 worker (at $6 per worker), then it pays $6 of total factor cost. Alternatively, if it hires 10 workers (at $15 per worker), then it pays $150 of total factor cost.

For OmniKing the total factor cost "curve" really is a "curve." The slope of this curve rises as more labor is hired. The changing slope of this curve is due to the changing price.

Although this total factor cost curve is based on the employment activity of OmniKing Island Resort, a well-known monopsony firm, it applies to any buyer with market control. Monopsonistic competition and oligopsony firms that also face positively-sloped supply curves generate comparable total factor cost curves.

<= TOTAL FACTOR COST CURVETOTAL FACTOR COST CURVE, PERFECT COMPETITION =>


Recommended Citation:

TOTAL FACTOR COST CURVE, MONOPSONY, AmosWEB Encyclonomic WEB*pedia, http://www.AmosWEB.com, AmosWEB LLC, 2000-2018. [Accessed: October 15, 2018].


Check Out These Related Terms...

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


Or For A Little Background...

     | market structures | perfect competition | perfect competition characteristics | perfect competition and demand | monopsony | oligopsony | monopsonistic competition | supply | supply price | law of supply | efficiency |


And For Further Study...

     | factor market analysis | short-run production analysis | marginal factor cost and average factor cost | factor supply | factor supply curve | supply by a firm | supply to a firm | mobility |


Search Again?

Back to the WEB*pedia


APLS

BLACK DISMALAPOD
[What's This?]

Today, you are likely to spend a great deal of time flipping through mail order catalogs trying to buy either decorative celebrity figurines or a flower arrangement with anything but tulips for your grandfather. Be on the lookout for broken fingernail clippers.
Your Complete Scope

This isn't me! What am I?

Approximately three-fourths of the U.S. paper currency in circular contains traces of cocaine.
"Give the American people a good cause, and there's nothing they can't lick. "

-- John Wayne, actor

AFA
Advertising Federation of America
A PEDestrian's Guide
Xtra Credit
Tell us what you think about AmosWEB. Like what you see? Have suggestions for improvements? Let us know. Click the User Feedback link.

User Feedback



| AmosWEB | WEB*pedia | GLOSS*arama | ECON*world | CLASS*portal | QUIZ*tastic | PED Guide | Xtra Credit | eTutor | A*PLS |
| About Us | Terms of Use | Privacy Statement |

Thanks for visiting AmosWEB
Copyright ©2000-2018 AmosWEB*LLC
Send comments or questions to: WebMaster