What is likely to occur in the case of the monopoly union/monopsony employer confrontation? Typically, wage/employment bargaining produces a compromise wage/employment outcome. Compromise achieved through countervailing power has the beneficial effect of moving the labor market away from the inefficient unchecked monopoly or monopsony solutions toward a more efficient labor market equilibrium. However, only in the unlikely event of per fectly matched monopoly/monopsony protagonists will the perfectly competitive outcome occur. Depending on the relative power of the union and the employer, either an above-market or a below-market wage outcome typically results, and employment opportunities are often below competitive employment levels. Nevertheless, monopoly/monopsony confrontations can have the beneficial effect of improving economic efficiency from that experienced under either unchecked monopoly or monopsony.
Was this article helpful?
Don't Blame Us If You End Up Enjoying Your Retired Life Like None Of Your Other Retired Friends. Already Freaked-Out About Your Retirement? Not Having Any Idea As To How You Should Be Planning For It? Started To Doubt If Your Later Years Would Really Be As Golden As They Promised? Fret Not Right Guidance Is Just Around The Corner.