What determines wages in non-competitive labor markets?
What does a non-competitive labor market look like? Monopolies hiring practices – recall that the most important aspect of a Monopoly is MR is less than Price. Additionally, compared to a competitive market, they will produce less. The result on labor is that less will be employed compared to a competitive market. Monopsony – a buyers monopoly – sellers (workers in this case) have only 1 buyer for their products (labor). Also, unlike a competitive labor market, in order to increase employment you must pay them more. So the result is fewer employees at lower wages.
