monopsony

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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.

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 ?
m] in Figure 2 show the equilibrium output and price in a monopsonistic viatical settlement market.
Indeed, total employment must fall in the model if each monopsonistic firm in an industry earns zero profits before a minimum wage is imposed.
In essence, the one segment where a positive employment impact is statistically significant (state-owned enterprises in the east) is the segment where monopsonistic behavior is more likely to prevail, potentially explaining the unusual positive and significant impact on employment.
Using data on average salaries in Kentucky for the 1989 1990 school year and a variety of specifications, Borland and Howsen (1992, 1993, 1996) estimate that the difference in average salaries between perfectly competitive and perfectly monopsonistic markets was less than $700 per year.
Models of Competitive and Monopsonistic Employment Determination
28) Monopolistic and monopsonistic markets are generally considered to be inefficient unless inefficiencies are offset by a Pareto improvement for consumers.
The federal government grew as a monopsonistic buyer and managed care plans were able to negotiate discounts.
This result will not be reversed even if the foreign enterprise is a monopsonistic employer.
Lowry and Winfrey (1974) hypothesized that markets with economies of scale, along with high raw material transportation costs, encourage the development of spatially dispersed firms with only one or just a few mills in any one area, which they called monopsonistic or oligopsonistic input bases.
100) Employing its monopsonistic pricing power, Pharmac has implemented a "sole-source, single tendering" system that denies U.
The Medicare end-stage renal disease (ESRD) program, as a virtually monopsonistic buyer of ESRD-related services, offers an example of this phenomenon (Farley 1994).
On the other hand, long-term contracts provide suppliers with a predictable demand and thus encourage product innovation by reducing concerns over sunk costs of development, or of monopsonistic exploitation of productivity advances by the manufacturer [Nishiguchi and Anderson 1995].