Trade Union In A Monopsony Flashcards
1
Q
Draw the monopsony trade union diagram
A
2
Q
What is a monopsonist
A
A single supplier of labour in the market
3
Q
What do trade unions do
A
They fight for better pay
Trade union controls the supply of labour at given wage rates
Strong trade unions makes the monopsonist a wage taker
Monopsonist hires workers up until MRP = MC
4
Q
What does this monopsony diagram show
A
Monopsony is now a wage taker as the trade union are now the wage setter
The marginal costs curve carries on from the MCc TU point as they need to increase the pay for all workers
Trade unions have increased wages
Trade unions have also increase employment
Improve efficiency
