Micro 6.5 0.0 / 5 ? EconomicsThe Determination of Relative Wage Rates and Levels of Employment in Imperfectly Competitive Labour MarketsA2/A-levelAQA Created by: neve.whinnCreated on: 17-03-20 19:10 What are 3 sources of market imperfection? Monopsony power, trade unions, imperfect information. 1 of 7 What is a monopsony? A market with a single dominant buyer, such as the government in relation to state school teachers. 2 of 7 What can an employer use market power for in a monopsony labour market? To reduce the wage rate and level of employment below those of a perfectly competitive labour market. 3 of 7 How are costs valued in a monopsony labour market? The marginal cost (MC) of employing workers exceeds the average cost (AC). 4 of 7 How can an employer attract an additional worker? The firm has to pay more to this worker as well as all other employees. 5 of 7 How is profit maximised? The monopsonist employs workers where MRP = MC. 6 of 7 How do the wage rate and employment level in a monopsony compare to those in a competitive labour market? They are both below those that would exist in a competitive labour market. 7 of 7
AQA Unit 3 Economics: Business Economics and the Distribution of Income 5.0 / 5 based on 1 rating Teacher recommended
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