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    monopsonistic exploitation

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    From Figure 1, a monopsonist's supply curve is the same as the market supply curve, and the marginal revenue product curve of team owners, the extra revenue generated by an additional worker, is represented by MRP. The marginal cost curve facing the team owners, is MC. The marginal cost curve is greater than the cost of additional purchases since the monopsonist must spend more on all of its purchases. The intersection of MRP and MC is at A. The quantity demanded of baseball players is Qm. The wage rate presented to baseball players is wm. The amount of monopsonistic exploitation is the distance between A and O. The amount of monopolistic exploitation is the distance between A and B. Total exploitation is the vertical distance between B and C.

    Where is O??
    Can you draw it in on the diagram??

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    Solution Preview

    I'm pretty sure that "O" is a type error, which should actually be "C".
    Also S curve is also the owner's marginal cost curve.

    In this figure, MFC (Marginal factor cost) is the cost of hiring one more worker, and MRP is the extra revenue generated by an additional ...

    Solution Summary

    This solution highlights the monopsonistic exploitation.