Monopsony

What is 'Monopsony'

Monopsony is 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.

BREAKING DOWN 'Monopsony'

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.

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RELATED FAQS
  1. What's the difference between monopoly and monopsony?

    Learn about the difference between a monopoly and a monopsony. Find out how these systems impact the suppliers and consumers ... Read Answer >>
  2. How does a monopoly contribute to market failure?

    Read a simple overview of the theory of market monopoly, where it originated and some contemporary challenges to the classical ... Read Answer >>
  3. What is a monopoly?

    Monopoly is a fun family game, but in real life, a monopoly can be dangerous to a country's economy. A monopoly occurs when ... Read Answer >>
  4. Are monopolies always bad?

    Learn why governments sanction some monopolies, such as monopolies over public utilities, and why these monopolies are good ... Read Answer >>
  5. What are common examples of monopolistic markets?

    Discover what causes real instances of market monopoly, how it persists and where monopoly privilege is most common in the ... Read Answer >>
  6. Why are monopolistic markets inefficient?

    Find out why general equilibrium economic models suggest monopolistic markets can lead to inefficiencies and why some economists ... Read Answer >>
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