Monopsony power
What Monopsony power means in Economics A-Level, as defined for AQA.
Definitions of Monopsony power
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Reference: AQA
Employer wage-setting power that, with the ability to segment the market and different wage elasticities of supply, allows firms to pay different groups different wages.
The market power of a single dominant employer in a labour market, who is a wage maker facing an upward-sloping labour supply curve.
Occurs when there is a single dominant buyer of labour, allowing the employer to dictate lower wages.
The power an employer must possess to set wages, acting as a wage maker.
Topics that use Monopsony power
- Discrimination in the labour market (AQA A-Level)
- The determination of relative wage rates and levels of employment in imperfectly competitive labour markets (AQA A-Level)
Related terms
- Age discrimination
- Arbitrage
- Average Cost of Labour (ACL)
- Business objectives
- Distribution of income
- Gender pay gap
- Imperfect information
- Macroeconomic performance
Using Monopsony power in the exam
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