Th3.5: ^^ Monopsony in the Labour Market Flashcards
In a monopsony market, there is only one…
buyer of the labour
In this situation, businesses know if they want to increase their labour force they will have to…
increase the wage they offer and, just like monopsony product markets, an increase in the wage for one increases the wage for all
Therefore the MC curve is above the supply curve (AC) of labour because…
it costs more to employ an additional worker than the average cost of labour
How will a firm determine how many workers to employ?
where the cost of employing them is equal to the value of that worker to the company
Refer to PP
Look at Graph 44. Where do they employ?
where MC = D at Q1 and at this output they will pay their workers W1 (determined by the S curve)
Refer to PP
Look at Graph 44. Compared to a perfectly competitive market (which would produce at W2Q2) they…
employ less people at a lower wage rate
Draw Graph 44 three times!
yayayayayyay! keep going i beg
