Government Intervention To Protect Suppliers And Employees Flashcards

1
Q

Two options of how the government intervenes

A

Directly or indirectly

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2
Q

What does the buying power of a monopsony mean

A

They can exploit their bargaining power with a supplier to negotiate lower prices which reduces the producer surplus / profits of many businesses in the supply-chain

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3
Q

What is one option for intervention to protect employees

A

Enforces a minimum price for suppliers - for example a minimum wage in the labour market

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4
Q

What is the aim for monopsony businesses and their suppliers

A

To reach a commercial agreement to achieve a more equitable distribution of revenues and profits

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