Universities are able to act as monopsonists in the market for professors because
A) a university usually does not consider hiring faculty members from another institution.
B) faculty members usually have to move to a different city when changing universities.
C) students like all of their professors.
D) senior faculty members are willing to move to a new university at any cost.

Question

Quizplus · Accepted Answer

Universities can act as monopsonists in the market for professors because faculty members usually have to move to a different city when changing universities. This reduces the number of potential employers for a faculty member and gives universities more bargaining power in terms of salary and benefits. However, it is not true that a university usually does not consider hiring faculty members from another institution, or that senior faculty members are willing to move to a new university at any cost. The fact that students like their professors is also not relevant to the market power of universities as monopsonists.

Universities Are Able to Act as Monopsonists in the Market