no direct competition in hiring, if they offer lower wages than would exist in a competitive market, employees

will have few options. If they want a job, they must accept the offered wage rate. Since the employer is

exploiting its market power, we call the firm a monopsony, a term introduced and widely discussed by Joan

Robinson (though she credited scholar Bertrand Hallward with invention of the word). The classical example of

monopsony is the sole coal company in a West Virginia town. If coal miners want to work, they must accept

what the coal company is paying. This is not the only example of monopsony. Think about surgical nurses in a

town with only one hospital. A situation in which employers have at least some market power over potential
employees is not that unusual. After all, most firms have many employees while there is only one employer.

Thus, even if there is some competition for workers, it may not feel that way to potential employees unless they
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