T6 - imperfectly competitive markets Flashcards
imperfections of the laboru amrket
monopsony
trade unions
discrimination
difficulty measurign prodctity
geo imobbility
occupuation immobility
poor info
what is a monopsony
where a firm has market power employing factors of production
there is one hirer and many workers
why in impfrfect comp market is mc>ac
as firms higher extra workers, they have to increase the wage fo all workers
what can trade unions do
bargain for wages above competitive equilibrium
hwo can trade uniosn bargain for better wages
reducing supply (striking etc)
when are trade unions not helpful
perfectly comp markets, as they reduce emplyment levels , as wage rises, mc does too, decreasing q
why/when can trade unions be useful
in industries of monospony powers
can increase producitive
if demand for laboru is inealstic
efficinecy wage thoery
when is there profit maxamsiation for a monopsony
mc = mrp
when is there profit maxamsiation for a monopsony
mc = mrp
what gives firms monopsony power
when they are the sole employer of workers in the market, they haev signficant buyign power
for a monoposny what is teh supply o flabour equal to
the average cost of labour
why must a monospony employer have to icnrease wages for each new work
to attractworkers into the market
why is the marginal cost of laboru greater than teh average
as firms have to icnrease the wages of all workers, fto emplye and attract new ones
in a monopsony are workers wages rgeater than there mrp
no as teh wage level is dervied from the supply curve, which is lower and less than the marginal cost curve
what does it mean when the difference between wages and mrp is massiev in a monospony laboru market
greater monopsony power
