What is monopsony competition?
Monopsony power exists when one buyer faces little competition from other buyers for that labour or good, so they are able to set wages or prices for the labour or goods they are buying at a level lower than would be the case in a competitive market.
Is a monopsony legal?
In a monopsony, a single buyer controls or dominates the demand for goods and services. Both a monopoly and monopsony can result in high profits for the dominant entity but often are considered illegal because they inhibit competition.
Why is NHS a monopsony?
The NHS and by default the government operates as a monopsony. This is a technical term to describe a market in which there is a significant or sole purchaser of goods or labour. Monopsonies also tend to employ fewer people than there would normally be in a competitive labour market.
What are the three shifters of resource supply?
Supply shifters include (1) prices of factors of production, (2) returns from alternative activities, (3) technology, (4) seller expectations, (5) natural events, and (6) the number of sellers. When these other variables change, the all-other-things-unchanged conditions behind the original supply curve no longer hold.
What are the two types of related goods?
There are two types of related goods in general: good(s) which can be consumed instead of the product and good(s) which is consumed together with the product. The former is called a substitute good and the latter is a complementary good.
What are the three main determinants of resource demand?
A change in resource demand is caused by (1) a change in the demand for the product for which the resource is an input; (2) a change in the productivity of the resource ; and (3) a change in the prices of other resources that are substitutes or complements of the resource in question.
What are the 7 factors that shift supply?
The seven factors which affect the changes of supply are as follows: (i) Natural Conditions (ii) Technical Progress (iii) Change in Factor Prices (iv) Transport Improvements (v) Calamities (vi) Monopolies (vii) Fiscal Policy.