In a monopsony, the employer has significant control over wages due to the lack of competition for labor. This leads to a situation where the wage set by the monopsonist is often _____ than the equilibrium wage found in a competitive labor market.

In a monopsony, there is only one main employer in a labor market, which gives that employer a lot of power over wages. Because there are few or no other job options for workers, the employer can set wages lower than what would be seen in a competitive market, where multiple employers would drive wages up. For example, if a town has only one factory hiring workers, that factory can pay less than what workers would earn if several factories were competing for their labor. As a result, workers might earn less than the equilibrium wage, which is the fair wage that would be paid if there were more job opportunities available. This situation can lead to lower overall income for workers and can affect their quality of life.