1. Monopoly in the labor market
Monopsony
Monopoly in the labor market

2. Monopsony A monopsony must ↑ wage rate to hire more workers
Definition: When one firm is the sole purchaser of labor in the factor market
Example: only buyer of labor in a small town
A monopsony must ↑ wage rate to hire more workers
NOT A WAGE TAKER!
End Result: a Monsopony will pay a LOWER WAGE & HIRE LESS WORKERS

3. Monopsony Monopsony hires less inputs LM < LC
To hire more workers wages must rise
for all workers (not a wage taker!)
MFCM
S = MFCc
DL = MRPL
Competitive Factor Industry
Wage WM LM
$10 =WC LC Ec EM
Qty-Labor
Bottom Line: Monpsony versus Competitive Input Industry:
Monopsony hires less inputs LM < LC
Monopsony firms pays less WM < WC