monopsony (redirected from Monopsonistic competition)

Monopsony

A market similar to a monopoly except that a large buyer not seller controls a large proportion of the market and drives the prices down. Sometimes referred to as the buyer's monopoly.

Notes:

People have accused Ernest and Julio Gallo (the big wine makers) of being a monopsony. They had such power buying grapes from growers, that sellers had no choice but to agree to their terms.

See also: Monopoly, Oligopoly, Oligopsony

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Monopsony

The existence of only one buyer in a market, forcing sellers to accept a lower price than the socially optimal price.

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monopsony

Of, relating to, or being a market in which there is a single buyer of a particular good or service. Businesses selling in a market characterized by monopsony are likely to suffer below-average profitability because of the lack of alternative outlets for their products. Compare monopoly.