Monopsony power may occur when:

Question

Quizplus · Accepted Answer

Monopsony power occurs when there is only one buyer (in this case, employer) in the market. Such power can be further strengthened if there are barriers to entry for other potential employers. In this context, option B suggests that there are psychic costs (such as emotional attachment to a particular location) that discourage workers from moving to another location to seek better employment opportunities. This can limit competition for labor and give employers more monopsony power. None of the other options refer to conditions that would give rise to monopsony power.

Monopsony Power May Occur When