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

do their research and find the opposite.

How does market power by an employer affect labor market outcomes? Intuitively, one might think that wages

will be lower than in a competitive labor market. Let’s prove it. We will tell the story for a monopsonist, but the

results will be qualitatively similar, although less extreme, for any firm with labor market power.

Think back to monopoly. The good news for the firm is that because the monopolist is the sole supplier in the

market, it can charge any price it wishes. The bad news is that if it wants to sell a greater quantity of output, it

must lower the price it charges. Monopsony is analogous. Because the monopsonist is the sole employer in a

labor market, it can offer any wage that it wishes. However, because they face the market supply curve for
{"batch_upload": true, "producer": "Prince 14.2 (www.princexml.com)", "title": "Principles of Microeconomics 3e", "source": "downloads\\business\\economics\\Microeconomics3e.pdf", "file_hash": "830b81f41611ac67a490444dbb5d6aed292224606965b06965b914443c93331a", "creationdate": "2022-12-07T14:15:44-06:00", "upload_timestamp": "2026-02-07T15:37:44.339247", "creator": "PDFMiner", "file_type": ".pdf", "file_size_mb": 26.99, "source_file": "downloads\\business\\economics\\Microeconomics3e.pdf", "moddate": "2022-12-07T14:23:05-06:00", "uploaded_via": "batch_uploader", "total_pages": 597, "file_name": "Microeconomics3e.pdf"}