Labor Economics · intermediate
What moves on the Monopsony & Minimum Wage diagram
Higher MRPL raises monopsonymonopsonyA market with a single dominant buyer, for labor, one employer with the power to set wages below competitive levels. employment and wages, but employer power keeps the wage below marginal productmarginal productThe extra output from one more unit of an input, holding others fixed..
Start at the monopsonymonopsonyA market with a single dominant buyer, for labor, one employer with the power to set wages below competitive levels. optimum.
Training raises what each worker produces. MRPL shifts right.
Employment and the wage rise, but the markdown gap persists: workers still earn less than their marginal productmarginal productThe extra output from one more unit of an input, holding others fixed..
Examiners ask this as: monopsony productivity, mrpl shifts.
Other scenarios on Monopsony & Minimum Wage