monopsony

(redirected from monopsonies)
Also found in: Dictionary, Thesaurus.
Related to monopsonies: monopsonist

Monopsony

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

Monopsony

Describing a market for a good or service with several potential sellers and only one potential buyer. Low prices mark the monopsonies because the sellers must compete for the buyer, perhaps to below sustainable level. One may thing of a monopsony as the polar opposite of a monopoly. See also: Buyer's Market.

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.

monopsony

a form of BUYER CONCENTRATION, that is, a MARKET situation in which a single buyer confronts many small suppliers. Monopsonists are often able to secure advantageous terms from suppliers in the form of BULK-BUYING price discounts and extended CREDIT terms. See MONOPOLY, BILATERAL MONOPOLY.
References in periodicals archive ?
(2008) (arguing that state government monopsonies are legitimate when
These collusive monopsonies are held to legal standards even stricter than those that apply to a pure monopsony.
The purpose of this article is not to estimate the marginal revenue products of baseball players or even the level of exploitation, but instead to further examine the workings of collusive monopsonies and show that the actual damage suffered by the sellers is less than the monopsonistic exploitation and, furthermore, a rather hard number to calculate.
While collusive monopsonies undoubtedly exploit the seller, the proof of monopsonistic exploitation is insufficient when establishing the economic harm caused to the seller.
When these firms are sellers, they are "oligopolies" (rather than monopolies); if they are purchasers of products, they are called "oligopsonies" (rather than monopsonies).
Thus, restaurants are socially efficient monopsonies. Further, when tips are included, workers are paid their social marginal product.
That restaurants are monopsonies can be seen by comparing their average wage cost with their marginal wage cost.
The important theoretical and empirical question is, however, whether or not wages are lower in the real world than they would be otherwise as a consequence of the existence of monopsonies. A necessary condition for wages to be higher under monopsony than they actually are is that the monopsonistic firms experience economic profits.