Knowra Monopsony Monopsony A market structure in which one buyer faces many sellers and has substantial influence over the price paid. The buyer’s market power can let it purchase less and pay less than in a competitive market.
Marginal expenditure : The additional cost incurred when a buyer purchases one more unit. A monopsonist typically faces rising marginal expenditure because attracting more supply requires offering a higher price.
Monopsony in labor markets : A labor-market condition in which one employer or a small set of employers has substantial wage-setting power. This is the best-known application, where workers sell labor to employers.
Perfect competition : A market structure with many buyers and sellers, homogeneous products, and no individual market power. Unlike a monopsonist, each buyer in perfect competition takes the market price as given.
Joan Robinson : A British economist whose 1933 book The Economics of Imperfect Competition developed influential analyses of market power. Robinson introduced the term monopsony and analyzed its labor-market implications.
Marginal revenue product : The additional revenue a firm earns from employing one more unit of an input, such as labor. In labor markets, the buyer’s hiring decision depends on the value produced by another worker.
Company town : A settlement in which one company owns much of the housing, commerce, or infrastructure and dominates local employment. Workers’ limited local alternatives can give the dominant employer buyer power over labor.
Monopoly : A market structure in which a single seller faces many buyers and can influence the selling price. Monopoly concentrates market power on the seller’s side rather than the buyer’s.
The Economics of Imperfect Competition : Joan Robinson’s 1933 book analyzing monopoly, monopsony, and imperfect competition. This work established monopsony as a counterpart to monopoly in economic theory.
Labor supply : The relationship between the wage rate and the amount of labor workers are willing to provide. An upward-sloping labor supply curve gives a dominant employer room to lower wages by hiring fewer workers.
Nurse labor market : The market in which nurses supply labor to hospitals, clinics, and other healthcare employers. Local concentration among hospitals can make nurses’ employment options and wages sensitive to buyer power.
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