We were introduced to the idea of monopsony earlier this week through the example of the NBA. Monopsony is defined as a market in which a single employer of labor has substantial hiring power. Characteristics of this kind of market are that there must be only a single buyer of a single kind of labor, the firm becomes the wage maker, and the type of labor is immobile. A firm participating in a monopsony and is the single employer of the labor benefits very much from this system because employees will fight for the existing jobs the company is providing and they will be willing to accept lower wages in order to get the job. An example of a monopsony that we are all aware of is between companies in the technology industry. While it is not a single employer of labor, it is still only a few large companies such as Amazon, Google, Cisco, Apple, and Oracle that are attracting a majority of the engineer workforce. The companies Cisco and Oracle were even accused of collusion because it was said that they agreed not to compete with each other on the wages they offered. By not having to match or increase what another company is offering to pay you, these big companies are able to save a lot of money despite paying their workers less than they are possibly worth. Monopsony is prevalent in many of our industries and allows firms to take advantage of employees and control the price in which they pay people.
I’ve pasted below what a monopsony curve looks like: 
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