When an employer is a monopsony that is driving wages _____ competitive levels, a labor union may serve to counteract the monopsonist's market power by driving wages:
A) below; lower.
B) above; higher.
C) below; higher.
D) above; lower.

Question

Quizplus · Accepted Answer

A monopsony, where a single buyer (employer) controls the market, often drives wages below competitive levels. A labor union can counteract this by negotiating for higher wages, thus bringing wages closer to or above competitive levels.

When an Employer Is a Monopsony That Is Driving Wages