Monopsony in the Labour Market I A Level and IB Economics

​Monopsony is a labour market structure in which there is a single powerful buyer of a particular type of labour. For example, the main buyer of the labour of doctors and nurses is the NHS or large employers such as Capita, G4S, Amazon and Sports Direct.

In the case of the labour market, a monopsony employer will tend to pay relatively lower wages and employ fewer people (than in a highly competitive labour market.  ​

This short revision video takes you through an analysis of how a monopsony employer may pay their workers less than the value of their marginal revenue product. This is a cause of labour market failure.​

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