Question

Nursing "Shortages": Monopsony Power in the Market for Registered Nurses?

Answer 1

In the labour market for Registered nurses, Monopsony power may contribute to the apparent shortages of Registered nurses. Monopsony occurs where there is one major employer and many workers seeking to gain employment. Many reasons could be there for such distortions, like, workers are paid less than their marginal revenue product. Also, firms with monopsony power often have a degree of monopoly selling power. This enables them to make high profits at the expense of consumers and workers. And, less care is taken about working conditions because workers don’t have many alternatives to the main firm.