The wage in a bilateral monopoly will be closer to the monopolistic or monopsonistic wage, depending on the relative bargaining strength of the buyer and seller.

Question

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In a bilateral monopoly, both the buyer and seller have some degree of market power. The wage that is eventually agreed upon will depend on the relative bargaining strength of the buyer and seller. If the buyer is relatively stronger, they will be able to negotiate a lower wage closer to the monopsonistic wage. If the seller is relatively stronger, they will be able to negotiate a higher wage closer to the monopolistic wage. Therefore, the wage in a bilateral monopoly will be closer to either the monopolistic or monopsonistic wage, depending on the bargaining power of each party.

The Wage in a Bilateral Monopoly Will Be Closer to the Monopolistic