A Comment to "Minimum Wages for Ronald McDonald Monopsonies - A Theory of Monopsonistic Competition" by V Bhaskar and Ted To

Bhaskar and To (1999) develop a model of monopsonistic competition and solve explicitly for equilibrium. While a minimum wage set just above the unconstrained optimum leads firms to increase employment it also causes firm exit as profits fall. In this note I show that the employment and welfare effects of the minimum wage which Bhaskar and To had thought to be ambiguous when firm exit was accounted for are in fact unambiguously positive.

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Year of publication:	2001-09-15
Authors:	Walsh, Frank
Institutions:	School of Economics, University College Dublin
Subject:	Monopsony \| minimum wage \| employment

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Extent:	application/pdf
Series:	Working Papers.
Type of publication:	Book / Working Paper
Language:	English
Notes:	Number 200118 9 pages
Classification:	J42 - Monopsony; Segmented Labor Markets ; J30 - Wages, Compensation, and Labor Costs. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005652912