Minimum wages for Ronald McDonald monopsonies: a theory of monopsonistic competition by V Bhaskar and Ted To - a comment

Frank Walsh

No 200118, Working Papers from School of Economics, University College Dublin

Abstract: 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.

Keywords: Monopsony; Minimum wage; Employment; Monopsonies; Minimum wage (search for similar items in EconPapers)
JEL-codes: J30 J42 (search for similar items in EconPapers)
Date: 2001-09
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http://hdl.handle.net/10197/930 First version, 2001 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ucn:wpaper:200118

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