DEFINITION of 'Oligopsony'

Similar to an oligopoly (few sellers), this is a market in which there are only a few large buyers for a product or service. This allows the buyers to exert a great deal of control over the sellers and can effectively drive down prices.

BREAKING DOWN 'Oligopsony'

A good example of an oligopsony would be the U.S. fast food industry, in which a small number of large buyers (i.e. McDonald's, Burger King, Wendy's) controls the U.S. meat market. Such control allows these fast food mega-chains to dictate the price they pay to farmers for meat and to influence animal welfare conditions and labor standards.

  1. Supply

    A fundamental economic concept that describes the total amount ...
  2. Monopsony

    A market similar to a monopoly except that a large buyer not ...
  3. Monopoly

    A situation in which a single company or group owns all or nearly ...
  4. Oligopoly

    A situation in which a particular market is controlled by a small ...
  5. Economics

    A social science that studies how individuals, governments, firms ...
  6. Demand

    An economic principle that describes a consumer's desire and ...
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