Suppose we have a labour market with a monopsony employer in a town.Now suppose that all workers form a union and negotiate a wage with the employer.We refer to this as a situation of

Question

Quizplus · Accepted Answer

In this scenario, the monopsony employer (single buyer of labor) and the union (single seller of labor) create a bilateral monopoly, where both sides have market power in wage negotiations.

Suppose We Have a Labour Market with a Monopsony Employer