Monopsony employers have a significant impact on the elasticity of the labour supply curve in their market. In a monopsony, where a single employer dominates, the labour supply to that employer becomes relatively inelastic. Workers have fewer alternative employment opportunities, making them less responsive to changes in wages offered by the monopsonist. This inelasticity allows the monopsonist to set lower wages without risking a significant loss of labour. However, if the monopsonist increases wages, they may attract a disproportionately large increase in applicants, reflecting a more elastic portion of the supply curve. This situation creates a unique dynamic where the monopsonist has the power to manipulate the labour market to its advantage, potentially leading to sub-optimal outcomes for workers, such as lower wages and limited employment opportunities. Understanding this influence is crucial in analysing labour mark.

The presence of a strong trade union in an imperfect market can affect a firm's labour cost and productivity in several ways. Strong unions often negotiate higher wages and better benefits for workers, which increases labour costs for the firm. However, these higher costs can be offset by improvements in productivity. Workers who are better compensated and work in favourable conditions are often more motivated, leading to higher productivity and lower turnover rates. Unions can also facilitate better communication between workers and management, leading to more efficient resolution of workplace issues and improvements in operational processes. Additionally, unions may advocate for training and skill development, further enhancing worker productivity. However, if wage increases are not aligned with productivity gains, the firm may face challenges in maintaining competitiveness, especially in markets where price competition is fierce. Therefore, while unions can contribute positively to productivity, the balance between fair wages and maintaining cost-effectiveness is crucial for firms in imperfect markets.

Minimum wage policies can lead to 'wage-push inflation,' especially in imperfect markets. When the government sets a minimum wage higher than the equilibrium wage, it can increase the overall cost of labour. Employers might respond by raising prices to maintain profit margins, leading to inflation. This effect is more pronounced in sectors heavily reliant on low-wage labour. In imperfect markets, where there are fewer competitive pressures to keep prices low, the pass-through effect of higher wages to prices can be more significant. However, the extent of wage-push inflation depends on various factors, such as the proportion of workers affected by the minimum wage, the degree of competition in the market, and the ability of businesses to absorb higher labour costs without increasing prices. While minimum wage policies aim to improve living standards for low-income workers, they must be carefully calibrated to avoid significant inflationary pressures, particularly in sectors with less competition.

Government intervention is crucial in addressing wage discrimination in imperfect markets. Discrimination based on gender, race, or other factors can lead to unequal pay for equal work. Governments can enact and enforce anti-discrimination laws to ensure fairness in wage determination. Such laws require employers to provide equal pay and benefits for employees performing the same role, irrespective of their personal characteristics. Additionally, government policies can mandate transparency in wage setting and require regular audits to identify and correct discriminatory practices. Governments can also support programs that promote diversity and inclusion in the workplace, ensuring underrepresented groups have equal opportunities in employment and wage progression. These interventions are essential in imperfect markets where market forces alone may not adequately address discriminatory practices, ensuring a more equitable and just labour market.

Trade unions in sectors with high unemployment rates face unique challenges when negotiating for higher wages. High unemployment implies a larger pool of job seekers, which can reduce the bargaining power of unions, as employers have more alternatives to unionised labour. In such scenarios, unions often focus on securing job security and better working conditions, rather than just pushing for higher wages. This approach is more sustainable as it balances the need to protect existing jobs while improving the overall work environment. Unions may also engage in political lobbying to influence government policies that support job creation, reduce unemployment, and maintain fair wages. Furthermore, they might collaborate with employers to implement training and upskilling programs, making their members more valuable and less replaceable. This strategic shift from purely wage-focused negotiations to a broader employment security and skill development agenda is crucial in high unemployment contexts.