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 ?
Under monopsony, a buyer with market power in its buying market reduces its purchases to infracompetitive levels, thereby reducing the supply.
If it is often noticed that a monopoly is a monopsony or a monopsony is a monopoly, this is rarely considered a necessity.
In addition to finding lower wages in monopsony markets, the researchers also found that, over time, firms that dominate their labor markets were less likely to share productivity gains with employees.
(3) This result is consistent with (and reliant upon) the economically symmetric effects of monopoly in output markets and monopsony in input markets.
They found that a combination of measurement error in the Card and Krueger telephone survey and the fact that the wages of many of the workers were already above both the new and old minimum wage accounted for Card and Krueger's findings, rather than a monopsony effect.
In monopsony a firm which offers below equilibrium wage rates will not per se have a shortage of labor, for if no other firms are available for workers to seek employment at, the only alternative for a worker taking a wage below his marginal revenue product is leisure time (9).
In this article, we first analyze the peculiarities of a non-discriminatory monopsony with two variable factors of production, paying special attention to the budget constraint involved: the budget constraint of a monopsonistic firm is, because of the endogeneity of the wage rate, non-linear.
(Blau and Kahn, 2016) The effect of women's absence of substitute income sources and their restricted job options is to make them more vulnerable to the risk of monopsony power (Ctefanescu-Mihaila, 2015; 2014a, b) than is the case for men.
(18) In those circumstances, however, when a buyer with monopsony power forces those suppliers to disfavor the buyer's rivals, injuring the suppliers as well as the rivals, those sellers would deserve protection from the exercise of buyer power.