On a larger political scale, the debate may focus on how free or how socialized should a market be, but among those that believe the markets should be as free as possible there is still concern over monopoly practices and how the government could be used as a tool to respond to them.
In this case, the monopsonists is said to be exploiting the workers by paying less than the MRP — i. It can achieve this because it does not have to pay the full value of the MRP. However, if there are several hair salons in the town, each salon will have to bid up the wage rate in order to attract sufficient hairdressers so that they can maximise their individual profits.
What if a union fixes a minimum wage? A union minimum wage A union can represent workers and seek to increase the benefits to workers. If a trade union enters the labour market and becomes the monopoly supplier of labour, it can force the monopsonist to pay a wage at, or nearer to, the market rate, and employ more workers.
The impact of the union minimum wage The effect of the minimum wage clearly depends upon its level, and whether it is set above the market rate - the greater it is above the competitive market rate, the lower the level of employment.
The impact of the union minimum wage also depends on the elasticity of demand and supply of labour. For example, if the demand for labour is relatively inelastic, jobs lost due to the minimum wage will be relatively small.
Similarly, if supply is inelastic, the minimum rate may not result in a significant change in employment.
Test your knowledge - try a quiz.THE SPIKE. It was late-afternoon. Forty-nine of us, forty-eight men and one woman, lay on the green waiting for the spike to open.
We were too tired to talk much.
Say's Law and Supply Side Economics. It should be known that at the beginning of a dynasty, taxation yields a large revenue from small assessments. Monopsony. The special case of the monopsonist is an important one. A monopsonist is a single buyer of labour, such as De Beers, the diamond producer, and the major employer of diamond workers in South regardbouddhiste.comonists are common in some small towns, where only one large firm provides the majority of .
Preliminary versions of economic research. Did Consumers Want Less Debt? Consumer Credit Demand Versus Supply in the Wake of the Financial Crisis.
Essay illustrating that the only way for a true monopoly to be formed is through coercion, usually exercised by government. Published: Tue, 16 May Overall, monopoly is a market structure that provides unique product to various buyers that conquers the whole market so that they .