Business, Legal & Accounting Glossary
(economics) a market in which goods or services are offered by several sellers but there is only one buyer
A monopsony, like a monopoly, signifies complete control over a particular market. However, a monopsony is different from a monopoly. In a monopoly, it is the sellers who have complete control over the market, but in a monopsony, the control of the market lies with a single buyer. Such a buyer is called a monopsonist. This buyer dictates the price of the product and exercises his complete control over the market, right from its labour force to raw materials. In a market that boasts of a situation of perfect competition, none of the individual buyers manages to acquire complete control.
Coined by Joan Robinson, monopsony is also known as the monopoly of the buyer. Ernest and Julio Gallo were monopsonists. They had a complete grasp over the market and made the sellers of grapes sell their produce at the price quoted by them.
There are certain economic concepts that are connected, in some way or other, to monopsony. Those concepts may be mentioned as below:
Bilateral monopoly could be defined as a market where there are a single dominant seller and a single dominant buyer. Bargaining is an important part of bilateral monopoly market system as both buyer and seller are trying their best to arrive at a compromise.
Duopsony is similar to a duopoly. In a duopsony, there are two major buyers in a particular market. This is applicable for a particular service or product in a market. It has been observed in a duopsony that buyers are able to lower prices of goods and services in a market as a result of their influence over the sellers.
To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.
Definitions for Monopsony are sourced/syndicated and enhanced from:
This glossary post was last updated: 6th April, 2020 | 0 Views.