In a monopsony, how does the labor market equilibrium differ from that in a competitive market, and what role can government intervention play in this context?

In a monopsony, there is only one major employer in the labor market, which gives that employer significant power over wages and hiring. Unlike a competitive market where many employers compete for workers, leading to higher wages, a monopsony can set lower wages because workers have fewer choices for employment. For example, if a small town has only one factory, the factory can pay lower wages because workers may feel they have no alternative jobs available. Government intervention can help in this situation by implementing minimum wage laws or regulations that promote fair pay, ensuring workers receive a livable wage even in a monopsonistic market. This intervention helps balance the power between employers and employees, leading to a more equitable labor market.