monopsony


monopsony

In economic theory, market situation in which there is only one buyer. An example of pure monopsony is a firm that is the only buyer of labour in an isolated town; such a firm would be able to pay lower wages to its employees than it would if other firms were present. Though cases of pure monopsony are rare, monopsonistic elements are found wherever there are many sellers and few purchasers.

This entry comes from Encyclopædia Britannica Concise.
For the full entry on monopsony, visit Britannica.com.

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