In a monopsony, the single buyer's ability to set wages often results in the marginal revenue product of labor for the last worker hired to __________ compared to a competitive market.

In a monopsony, there is only one buyer for labor, which gives that buyer significant power over wages. This means the employer can set lower wages than what workers might earn in a competitive market, where many employers are vying for workers. As a result, the marginal revenue product of labor for the last worker hired is usually lower because the monopsonist pays a wage that is less than the value of the worker’s contribution to the company. For example, if a company in a monopsony pays a worker $15 per hour while the competitive market would pay $20 for similar work, the last worker hired receives less than their true worth. This situation can lead to fewer workers being hired overall, reducing economic efficiency.