quality:correction
Minimum wage

Here the minimum wage is w '', higher than the monopsonistic w. Because of the binding effects of minimum wage and the excess supply of labour (as defined by the monopsony status), the marginal cost of labour for the firm becomes constant (the price of hiring an additional worker rather than the increasing cost as labour becomes more scarce). This means that the firm maximizes profit at the intersection of the new marginal cost line (MC ' in the diagram) and Marginal Revenue Product line (the additional revenue for selling one more unit). This is the point where it becomes more expensive to produce an additional item than is earned in revenue from selling that item.