6.4 The Determination of Relative Wage Rates and Levels of Employment in Imperfectly Competitive Labour Markets

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4 Terms

1
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What is monopsony power in the labour market

Monopsony power occurs when there is only one employer in the labour market, giving the employer wage-setting power

2
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How does a monopsony power affect wages and employment

A monopsonist can set wages below the competitive equilibrium, leading to lower wages and employment levels

3
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What role do trade unions play in an imperfectly competitive labour market

Trade Unions can negotiate for higher wages and better working conditions, counteracting monopsony power

4
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What is imperfect information in the labour market

Imperfect information occurs when workers or employers do not have complete knowledge about job opportunities or worker productivity