monopsony

Monopsony

A labour market with just one employer.

What % of the UK healthcare market does the NHS control

90%. Other examples-supermarkets, military, farmers

MRPofL

Marginal Revenue Product of labour MPPx MRofL (marginal physical product- the number of extra units made when hiring one extra worker)

a monopsony will always hire workers where

The MRP=MCofL

perfectly competitive labour market

A labour market with lots of employers and employees, no barriers to entry and identical workers.

comparing monopsony labour market with perfectly competitve labour market

Monopsony has lower wages and lower quantity of employment as they dont have to rise wages to compete with other firms

what will monopsony diagram look like for profit max

equilibrium at MRP and MCofL, with the wage at ACofL

Average cost of labour

The total cost of labour divided by the quantity of labour.

marginal cost of labour

The cost of hiring one extra worker.

Monopsony profit maximising quantity of labour

Producing where the marginal cost of labour equals the marginal revenue product of labour i.e. MCL = MRPL

asset buble?

refers to a situation in which the prices of certain assets rise rapidly and significantly above their fundamental value