A. monopolistic
B. oligopolistic
C. monopsonistic
D. competitive
Correct Answer:
Option A – monopolistic
Explanation
The word ‘Monopolistic’ relates to a person or business that has exclusive possession or control of the supply of or trade in a commodity or service. When workers have a union, the supply of labour is said to be monopolistic. By forming the union, the rights and interest of workers under the union are protected, and they would normally use it to influence and control the supply of labour.
If a trade union enters the labour market and becomes the monopoly supplier of labour supply it can force the market to pay a wage at, or nearer to, the market rate, and employ more workers.
