If a monopsonist could price discriminate in wages it would only pay each worker the minimum required to hire her. Since it wouldn't need to raise all wages, the labor supply curve, L, would also be the MFC curve.

    Total labor cost would be the orange shaded area and labor's contribution to profit would be the green shaded area. The firm would hire as many workers as a competitive firm but only the last worker hired would receive a wage equal to the competitive wage. This is far more profitable than a simple monopsony and is may be one reason many firms try to keep wages and salaries secret. Note also that there is no lost surplus.

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