New Upcoming Legal Jobs Free Workshop March 11 at 5 PM. Register here

    Question

    Which of the following correctly defines the term

    ‘monopsony’?
    A A single enterprise is being supplier of a particular commodity or service Correct Answer Incorrect Answer
    B An industry being dominated by a small group of large suppliers Correct Answer Incorrect Answer
    C An industry being dominated by small group of buyers Correct Answer Incorrect Answer
    D A single buyer substantially controlling the market Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    A monopsony is a market condition in which there is only one buyer, the monopsonist. It is a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers.  An oligopoly is a market structure in which a few firms dominate. When a market is shared between a few firms, it is said to be highly concentrated.  A monopoly contains a single firm that produces goods with no close substitute.

    Practice Next