Monopsony Theory Revisited

The Economic Theory of Costs: Foundations and New Directions, edited by Matthew McCaffrey, Routledge 2017

27 Pages Posted: 9 May 2017 Last revised: 11 Jul 2017

See all articles by Xavier Méra

Xavier Méra

Université catholique de l'Ouest

Date Written: May 2, 2017

Abstract

Standard monopsony theory, old and new, lacks a realistic criterion to distinguish between monopsony and competitive prices. Consequently, prominent Austrian critics have by and large dismissed it. However, the idea that human action occurs in discrete steps, and consequently that the elasticity of the supply schedules of the factors of production, as well as the elasticity of the demand schedules for their products, can be altered as a result of coercion, lead to a theory of "monopoly price-gap", with monopoly and monopsony prices as two features of the same phenomenon.

Keywords: monopsony, monopoly

JEL Classification: B21, B25, B13, B53, D33, D41, D42, D43, D61, J23, J21, J31, J42, L12, L13

Suggested Citation

Méra, Xavier, Monopsony Theory Revisited (May 2, 2017). The Economic Theory of Costs: Foundations and New Directions, edited by Matthew McCaffrey, Routledge 2017. Available at SSRN: https://ssrn.com/abstract=2964175 or http://dx.doi.org/10.2139/ssrn.2964175

Xavier Méra (Contact Author)

Université catholique de l'Ouest ( email )

3 place André Leroy
Angers, 49000
France

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