In the case of a monopsony, higher wage rates (over some range) do not necessarily imply fewer persons working.

Question

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In a monopsony, where there is only one buyer of labor (the employer), the employer has market power to set wages. Over some range, higher wages can attract more workers without reducing employment, because the monopsonist controls the wage rate and can balance the marginal cost of labor with the marginal benefit, potentially increasing employment if it decides to hire more at higher wages.

In the Case of a Monopsony, Higher Wage Rates (Over