A monopsonist hires labor in a market with perfectly competitive supply.Whenever she hires an additional worker,

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As a monopsonist, the employer has market power in hiring workers and can affect the wage rate. When hiring an additional worker, the monopsonist increases demand for labor which raises the marginal product of labor and increases the value of an additional worker. Therefore, the monopsonist must raise the wage paid to all workers already hired in order to prevent them from leaving for a better wage elsewhere.

A Monopsonist Hires Labor in a Market with Perfectly Competitive