Monopsony - Such a situation results in exploitation of...

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Monopsony: Monopoly in the product market is a condition where only one producer or seller operates. Similarly when only one employer is buying labor he enjoys monopsony power in the labor market. The workers have no option but to work with the monopsonist and to accept whatever wage rate is offered by him. The presence of monopsony causes a lower rate of wages than what the workers ordinarily deserve.
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Unformatted text preview: Such a situation results in exploitation of labor. By exploitation, we mean that a smaller wage remuneration is paid to the workers than what they are entitled to receive under competitive rule. There are two possible cases of exploitation. In one case, monopoly power is enjoyed only in the labor market. In the other case, the producer is a monopolist both in the labor and the product markets....
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