12_Monopsony and Factor Markets Overview (micro)

Monopsony

A market structure where a single buyer dominates

Marginal Cost of Labor

The additional cost incurred by hiring one more worker in a monopsonistic labor market

Value of Marginal Product

The additional revenue generated by employing one more unit of a factor of production

Land

A fixed asset provided by nature that cannot be easily increased or decreased

Physical Capital

Produced goods such as machines and tools used as inputs for further production

Human Capital

Skills and knowledge acquired through education and training

Tangible Assets

Physical assets like land

Intangible Assets

Non-physical assets like patents

Present Value

The current worth of a future payment

Asset Rental Rate

The price paid to use an asset for a specific period

Equilibrium in Factor Markets

Occurs when the value of the marginal product equals the rental rate or wage rate

Black Death's Impact

Wages increased due to reduced labor supply