1 / 13

L21

L21. Noncompetitive Factor Markets. 2 questions. Impact of market power in goods market on labor market Market Power in labor market. SOH (Monopoly). Labor Demand. Equilibrium. Equilibrium, General Elasticity. Monopoly and LM. Increasing Labor by 1 gives less than MPL of revenue

marlow
Download Presentation

L21

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. L21 Noncompetitive Factor Markets

  2. 2 questions • Impact of market power in goods market on labor market • Market Power in labor market

  3. SOH (Monopoly)

  4. Labor Demand

  5. Equilibrium

  6. Equilibrium, General Elasticity

  7. Monopoly and LM • Increasing Labor by 1 gives less than MPL of revenue • Monopoly demands less labor • The reduction of employment depends on elasticity • Monopoly and minimal wage rate?

  8. Monopsony • Market power on “buyers” side • Most important monopsony: Labor market • Monopsony and minimal wage rate

  9. Monopsony

  10. SOH (Monopsony):

  11. Monopsony: Optimal Choice

  12. Minimal Wage Rate

  13. Minimal Wage rate: Monopsony • Increases Labor in equilibrium • Increases wage in equilibrium • Restores efficiency

More Related