3.4.6 - Monopsony

    Cards (14)

    • What is a monopsony?
      A market with one buyer
    • In which market does buyer power typically exist?
      Labour markets
    • What are the characteristics of a monopsony?
      Single buyer, few alternatives for sellers
    • What does a monopsonist typically do to wages?
      Suppresses wages
    • What is the marginal cost of labor in a monopsony?
      Lower than in competitive markets
    • How does a monopsony affect employment levels?
      Reduces employment levels
    • What is the difference between monopsony and monopoly?
      Monopsony has one buyer, monopoly has one seller
    • What is wage suppression in a monopsony?
      Monopsonist pays lower wages
    • What is a potential effect of monopsony on unemployment?
      Fewer jobs offered at lower wages
    • What policy can prevent excessively low wages in a monopsony?
      Minimum wage
    • How does government intervention help in a monopsony?
      Encourages market competition
    • What role do trade unions play in a monopsony?
      Workers negotiate for better wages
    • What are the effects of a monopsony on wages and employment?
      • Lower wages
      • Reduced employment levels
      • Fewer jobs offered
    • What policies can mitigate the effects of monopsony?
      • Minimum wage laws
      • Government intervention to promote competition
      • Trade unionisation for wage negotiation
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