Asked by Johanna Turney on May 10, 2024
Verified
Empirical studies suggest that,other things equal,the smaller the number of hospitals in a city,the lower are nurses' wages.This is evidence that:
A) the labor markets of nurses are purely competitive.
B) hospitals may possess some degree of monopsony power.
C) the minimum wage does not apply to nurses.
D) labor unions have been ineffective in increasing the wages of nurses.
Monopsony Power
The market power possessed by a single buyer to influence the price at which they purchase goods or services, often leading to lower prices for sellers.
Nurses' Wages
Compensation paid to nursing professionals, influenced by factors like location, experience, and education level.
- Acquire an understanding of monopsony's traits in the workforce market.
- Survey the outcomes of monopsony regarding pay scales and employment totals.
Verified Answer
SW
Shanette WarrenMay 17, 2024
Final Answer :
B
Explanation :
The evidence that smaller numbers of hospitals in a city lead to lower wages for nurses suggests that these hospitals may possess some degree of monopsony power in the nurses' labor market. Monopsony power exists when a single buyer (in this case, hospitals) has a degree of control over the price or wages paid in a particular market. This suggests that the market for nurses is not purely competitive, as there are not enough hospitals to create a perfectly competitive labor market. The other answer choices are not directly supported by the given evidence.
Learning Objectives
- Acquire an understanding of monopsony's traits in the workforce market.
- Survey the outcomes of monopsony regarding pay scales and employment totals.