Monopsony

Question 1

monopsony

Answer 1

Single buyer in a market
Assumed profit maximisers
able to negotiate lower prices
Able to set market price

Question 2

Cost of a monopsony

Answer 2

Farmers might be taken advantage of and therefore might lose profits
Employees get a lower wage, trade unions counteract this
Workers might become unproductive if wages are low

Question 3

Benefits of a monopson

Answer 3

NHS has monopsony power when buying drugs. They are able to negotiate lower prices.
Consumers might receive lower prices

Question 4

Types of barriers to entry

Answer 4

Economies of scale
legal barriers
Branding
predatory pricing
limit pricing
anticompetitive pricing
vertical intergration
brand proliferation

Question 5

Types of barriers to exit

Answer 5

Write off assets and pay leases
losing a brand
the cost of making workers redundant