Monopsony Flashcards
1
Q
What is a monoposy
A
A market with only 1 buyer
2
Q
What is monopsony power?
A
Ability to affect the price of a good
3
Q
What condition will the buyer buy until for a Monopsony?
A
MV = ME
4
Q
Why is the Marginal Expenditure curve higher than the Supply curve?
A
Because supply is upward sloping and showing average expenditure, meaning that ME would be an extra (higher) cost for the company
5
Q
How do you find price on a monpsony graph?
A
Price comes from supply curve (when ME = MV)
6
Q
What happens when the monopsonist has inelastic demand?
A
The price drops significantly
