Sources of Monopsony Power Homework Help

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Monopsony is an important topic that you will study in the subject of Economics. Many students find it challenging to understand the various sources of monopsony power without professional help. If that is the same case with you, then you must opt for sources of monopsony power homework help.

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Get to know about Sources of Monopsony Power

Monopsony is a situation in which there is a single buyer, but the sellers are many. You can think it like a situation where one entity is having the entire power to decide the terms of selling offer because this entity is the sole purchaser of the goods and services offered by others in the economy. You can also say that it is a kind of buyer’s monopoly.

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Monopsony power in labor market

One of the perfect examples of monopsony power is the labor market. There can be a situation where there is a single employer, but the people who need employment are many in number. Thus in such a situation the firm gets immense power and can even exploit the workforce by giving them lower wages or making them work for long hours in unsuitable conditions. This happens because there is just one entity that is willing to buy the services offered by workers.

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The different sources

There can be various Sources of Monopsony Power from the point of view of a labor market like-

  • The case of government jobs where you can consider that the government is the sole job provider for the people.
  • Unemployment is one of the reasons why the monopsony power is really big because there is a lot of workforce but limited means of employ ability.
  • Sometimes lack of information is also a reason for aggravation of monopsony power. People may be unaware of other sources of employment.
  • Many times the reason for monopsony power is the geographical immobility.
  • Shift patterns are also the source of monopsony power.
  • Unwillingness to change jobs is also a reason for monopsony power in an economy.
  • You will notice that many times a business entity that has monopoly in selling will have monopsony in the market too.

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