A monopsonist will only hire NM worker at wage WM. The now smaller orange area = NM X WM, is the monopsonist's total labor costs. Monopsonist's Surplus is the green area + purple area. Labor costs have fallen by amounts equal to the purple area + blue area. The red triangle represents reduced labor generated revenue which isn't recovered in savings.

    The monopsonist is better off than an identical firm which hires labor in a competitive mareket by the purple area + blue area - red area.

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