Monopsony in the Labour Market I A Level and IB Economics

​Monopsony is a labour market structure in which there is a single powerful buyer of a particular type of labour. For example, the main buyer of the labour of doctors and nurses is the NHS or large employers such as Capita, G4S, Amazon and Sports Direct.

In the case of the labour market, a monopsony employer will tend to pay relatively lower wages and employ fewer people (than in a highly competitive labour market. ​

This short revision video takes you through an analysis of how a monopsony employer may pay their workers less than the value of their marginal revenue product. This is a cause of labour market failure.​

#aqaeconomics #ibeconomics #edexceleconomics #monopsony #labourmarket

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[AH]

Could we say that FDI opening up in areas with low employment opportunities can have some degree of monopsony power such as exploiting desperate workers with lower wages ?

[marketingsam]

Very interesting, is it then fair to say if we had multiple versions of the NHS or say had a bigger private health care system both which would create more labour market competition and assuming the labour supply remained this combo would create higher wages?

[zoyaali]

monopsony as the price of labour increases, the marginal expenses on labour
A. Increase
B. Remain same
C. Decrease
D. Are very high
Plz ans the correct one

[charliegoff]

Why wouldn't a "non-monopsony" power firm employ at level E2 anyway? surely this would lead to greater profits for them also? I don't understand why firms would employ more workers just because the labour market is competitive
Any response appreciated