WALMART UPS PAY WELL ABOVE MINIMUM WAGE

Walmart announced it will pay 500,000 workers at least $9 an hour from April 2015 and at least $10 an hour from February 2016. The union-backed group OUR Walmart took credit for the company's announcement but a leader of the group said the improved wages fell short of what was needed.Black Friday protesters were demanding $15 an hour.

1. Assuming that Walmart has market power in a labour market, explain how the firm could use that market power in setting wages.
2. Draw a graph to illustrate how Walmart might use labour market power to set wages.
3. Explain how OUR Walmart would attempt to counteract Walmart's wage offers in a bilateral monopoly.
4. Explain how the wage rate would be determined if the market were a bilateral monopoly.
5. Based upon evidence presented in this article, does Walmart function as a monopsony in labour markets, or is the market for retail labour competitive? Explain.
6. If the market for retail labour is competitive, explain the effect of OUR Walmart on the wage rate and employment. Draw a graph to illustrate your answer.