3.6 - Monopsony Restriction

Question 1

What is the purpose of intervention to restrict monopsony power?

Answer 1

Protect employees + suppliers
Price/wage equity

Question 2

How can monopsony power become harmful?

Answer 2

Buying + bargaining power
Profit maximising
Drives down wages + prices
Suppliers forced to take low price

Question 3

What are the general intervention strategies against monopsonists?

Answer 3

Legislation/Regulation
Unionisation
Encourage contestability
Block mergers
Fines

Question 4

What does monopsony intervention depend on?

Answer 4

Monopoly counter balance
Market accessibility
Supplier partnerships (LR/SR)
Total strength