In a bilateral monopoly, the wage rate is likely to be ________ than the value of marginal product of labor and ________ than in a pure monopsony.

Question

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In a bilateral monopoly, the wage rate is determined through negotiation between a single buyer (monopsonist) and a single seller (monopolist). It is likely to be lower than the value of the marginal product of labor because the monopsonist has some power to push wages down. However, it is likely to be higher than in a pure monopsony because the monopolist (labor union) can negotiate for higher wages.

In a Bilateral Monopoly, the Wage Rate Is Likely to Be