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Monopsony, Unions, Bilateral Monopoly Labor Markets

Monopsony Model. Critical Attributes of Monopsony Labor Markets:There is a single buyer of a certain labor typeMovement of labor is restricted, either geographically or because workers would have to acquire new skillsThe employer is a

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Monopsony, Unions, Bilateral Monopoly Labor Markets

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    1. Monopsony, Unions, & Bilateral Monopoly Labor Markets Imperfectly Competitive Labor Markets

    2. Monopsony Model Critical Attributes of Monopsony Labor Markets: There is a single buyer of a certain labor type Movement of labor is restricted, either geographically or because workers would have to acquire new skills The employer is a “wage maker,” because the wage rate it must pay varies directly with the number of workers it employs

    3. Graphing Monopsony Upward sloping supply curve S = ARC The more workers a firm attempts to employ the higher the wage they must offer MRC is higher than the wage If monopsonists increase wages, they must do so for all workers they employ Equilibrium wage & employment Monopsonists hire the quantity of workers at MRC = MRP, at the wage on the supply curve directly below MRC = MRP

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