oligopsony

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Related to oligopsonies: oligopsonistic

Oligopsony

A Market characterized by a small number of large buyers who control all purchases and therefore the market price of a good or service.

Oligopsony

A market in which there are only a few, very large buyers. Sellers in an oligopsony may have difficulty remaining in business as the buyers have a great deal of power to dictate prices. This may affect both the profit margin and other factors, such as labor conditions or wages. It is the opposite of an oligopoly.

oligopsony

A market in which a limited number of buyers follow the leadership of a single large firm. For example, in a town or region, a large bank may set rates on certificates of deposit that are then adopted by smaller banks and savings and loan associations on their own certificates of deposit. Compare oligopoly.

oligopsony

a form of BUYER CONCENTRATION, that is, a MARKET situation in which a few large buyers confront many small suppliers. Powerful buyers are often able to secure advantageous terms from suppliers in the form of BULK-BUYING price discounts and extended credit terms. See also OLIGOPOLY, BILATERAL OLIGOPOLY, COUNTERVAILING POWER.