Monopsony (Noun)
Meaning
(economics) a market in which goods or services are offered by several sellers but there is only one buyer.
Classification
Nouns denoting natural processes.
Examples
- A company town often creates a monopsony in which the employer is the sole buyer of labor in the area, giving them a great deal of power over the local workforce.
- In some rural communities, a single factory may create a local monopsony in the labor market, making it difficult for workers to find alternative employment.
- The government's purchase of military equipment from private contractors can create a monopsony, where the government is the sole buyer of certain goods and services.
- Apple's dominance in the mobile app market has been criticized as a monopsony, as developers have limited options for selling their apps outside of the App Store.
- A small town with only one major hospital can create a monopsony in the local healthcare labor market, making it difficult for nurses and doctors to negotiate higher salaries.