Microeconomics › Section N · Labor markets and income › Topic N.2
Wages when employers have market power
Monopoly is one seller facing many buyers; its mirror is one buyer facing many sellers - and the sellers here are workers. A monopsony employer pays less than the value its last hire adds and employs fewer people than a competitive market would.
In this topic
- Labour power, two sides
- What a monopsony is
- The marginal cost of labour
- Worked example: the monopsony outcome
- The mirror of monopoly
- Where monopsony lives today
- Worked example: the minimum wage surprise
- The labour-law response
- Common mistakes to avoid
- Key takeaways
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