In the real world labour markets are rarely perfectly competitive. This is because workers or firms usually have the power to set and influence wages and therefore wages may be set to levels different than anticipated by MRP theory.
Different Imperfections in the Labour Market
1. Monopsony:
This occurs when there is just one buyer of labour in a market.Even if there are more than one employer, firms may still have the ability to set wages. Therefore they have Monopsony power
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