§ Characteristics
§ Single buyer
§ Labor immobile:
§ The workers who provide the type of labor needed have few employment options other than working for the monopsony, maybe because they are geographically immobile or their skills are not transferable to other jobs.
§ Firm is a “wage maker”.
§ meaning that the wage rate it must pay varies
directly with the number of workers available. .
§ Firm labor supply is upward
MRC is higher than wage rate
§ To maximize profit, the monopsonist will employ the quantity of labor at which MRC and MRP are equal.