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Noncompetitive Factor Markets

Published bySiska Yulia Budiono Modified over 5 years ago

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Presentation on theme: "Noncompetitive Factor Markets"— Presentation transcript:

1 Noncompetitive Factor Markets
L21 Noncompetitive Factor Markets

2 3 questions Market power on goods market and demand for labor
Buyers Market Power: Labor Market

3 Competitive Demand

4 Equilibrium: Competitive Model

5 Monopoly Demand

6 Equilibrium in LM w/p y

7 Monopoly and LM Increasing Labor by 1 gives less than MPL of revenue
Monopoly demands less labor The reduction of employment depends on elasticity

8 Monopsony Market power on “buyers” side
Most important monopsony: Labor market Monopsony and minimal wage rate

9 Monopsony

10 Monopsony: Secret of Happiness

11 Monopsony: Optimal Choice

12 Minimal Wage Rate

13 Minimal Wage rate: Monopsony
Increases Labor in equilibrium Increases wage in equilibrium Restores efficiency

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