Monday, June 11, 2007

Monopsony's in labour markets

heya i was just wondering if you could tell the advantages and disadvantages of monopsonies in labour markets?

Monopsonies don't really have any advantages as such. The only real beneficiaries are firms, who are able to pay lower wages and make more profit. From a workers point of view, monopsonies are bad. They lead to lower wages, quantity of workers is less than in a competitive market and it is more likely conditions will be worse.

See: Monopsony and labour market imperfections

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