Great Post Nazario, I agree it should be the interaction of market demand and supply that creates the wage and the level of employment. It’s easy to assume that the problem of monopsony in labor markets can be efficiently dealt with simply by imposing a minimum wage but that is much easier said than done.
The levels of minimum wages imposed in typical modern economies are usually low relative to the average levels of wages. To the extent that monopsony exists at wage levels below the minimum wage, the imposition of that minimum wage would eliminate part or all of the wage reduction due to the monopsony. If the minimum wage is above the socially efficient level of wages in the monopsonistic industry, however, it will reestablish an employment
