8.3 Labour market forces and government intervention
Compare the impact of an increase in labour productivity on a firm in a monopsony labour market with an increase in labour productivity on a firm operating in a perfectly competitive labour market.
How does economic analysis explain the level of wage rates in a perfectly competitive labour market.
The introduction of a trade union into a perfectly competitive labour market will always lead to higher wage levels and a higher level of unemployment. With the help of a diagram, evaluate this statement. [20]
