Micro 4 Monopsony

Monopsony

-The only firm hiring resources in a market

-Labor is immobile

-Firm is the wage maker

A. S upward sloping

Profit maximization

-MFC = MRP

A. Set the Q

-Down the supply curve

B. Find the wage

-Firm hires fewer workers at a lower cost than a perfectly competitive firm

Economic rent

-A payment to a resource owner above what is needed to keep the resource in current use

-Best applied to a resource with perfectly inelastic supply

-Cannot be collected on a goof with perfectly elastic supply

Models of union behavior - Demand Enhancement

-Right shift in demand

A. Inc product demand

I. Advertising, Political campaigns, and tariffs

-Increased productivity

A. Training and educated

-Raise price of other resources

A. Minimum wage