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Competitive Labor Market in a
Competitve Product Market
Competitive Labor Market in an
Imperfectly Competitive Product Market
Monopsony
Union: Increase
Demand
Union: Craft
(Exclusive)
Union: Inclusive
(Industrial)
Union: Bilateral
Monopoly
Minimum Wage Traditional
Model:
employment decreases
Minimum Wage in a
Monopsony:
employment increases
Does the Minimum wage help the
poor?
YES if the demand for labor is
inelastic because total income increases from 0ADF to
0BCE
Does the Minimum wage help the
poor?
NO if demand for labor is elastic
because total income decreases from 0adf to 0bce
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