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Monopsony:

Definition of Monopsony:

 

"When there is a single firm hiring the labor in the market, it is called monopsony in economics".

 

Under perfect competition, the labor gets wages equal to its marginal revenue product. There is no exploitation of labor. However, when the market of labor is imperfect, there emerges the phenomenon of exploitation of labor. How the wages are determined under imperfect competition and their exploitation by the monopnist firm is explained in brief as under.

 

Characteristics/Features of Monopsony:


Monopsony in the labor market, is said to exist when there is a single buyer of labor. The main characteristics of monopsony are as under:

(i) The firm or employer hires a large portion of the total employment of a certain type of labor.

(ii) The mobility of labor is very much limited either geographically or in terms of skills of offer.

(iii) The monopnist faces imperfect competition in the labor market but perfect competition in the product market.

(iv) The single buyer faces a large number of workers who are unorganized or non-unionized.

 

Relevant Articles:

 

Definition of Wages
Various System of Wages Payments
Payments of Wages on the Basis of Form/Kinds of Wages
Why Wages of Women Lower Than Men
How are Wages Determined/Theories of Wages Determination
Nominal and Real Cost of Labor
Minimum Wage
Monopsony
 

Principles and Theories of Micro Economics
Definition and Explanation of Economics
Theory of Consumer Behavior
Indifference Curve Analysis of Consumer's Equilibrium
Theory of Demand
Theory of Supply
Elasticity of Demand
Elasticity of Supply
Equilibrium of Demand and Supply
Economic Resources
Scale of Production
Laws of Returns
Production Function
Cost Analysis
Various Revenue Concepts
Price and output Determination Under Perfect Competition
Price and Output Determination Under Monopoly
Price and Output Determination Under Monopolistic/Imperfect Competition
Theory of Factor Pricing OR Theory of Distribution
Rent
Wages
Interest
Profits
Principles and Theories of Macro Economics
National Income and Its Measurement
Principles of Public Finance
Public Revenue and Taxation
National Debt and Income Determination
Fiscal Policy
Determinants of the Level of National Income and Employment
Determination of National Income
Theories of Employment
Theory of International Trade
Balance of Payments
Commercial Policy
Development and Planning Economics
Introduction to Development Economics
Features of Developing Countries
Economic Development and Economic Growth
Theories of Under Development
Theories of Economic Growth
Agriculture and Economic Development
Monetary Economics and Public Finance
History of Money

 

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