Principles of Microeconomics / Unit 13 MIC 1216 short lesson, about 20 seconds
Monopsony
Captions available
The idea
A monopsony is a market with a single buyer. A mining town's one employer faces the whole upward-sloping supply of labor, so to hire more it must raise the wage, and pay it to everyone already employed.
In practice
The one hospital in town hiring nurses.
Where people slip
Monopoly is one seller, monopsony one buyer; a firm has monopsony power whenever supply slopes up.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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