Monopsony Flashcards
1
Q
Define a monopsony and give 2 examples
A
A monopsony is a single buyer in the market
Examples: The Network Rail for track and maintenance
Government for teachers
2
Q
Name the characteristics of a monopsony
A
- profit maximisers
- firms with monopsony power is able to negotiate low prices because their suppliers have no where else to sell (they are the only buyer in the market)
- they can set the market price
3
Q
What is the costs and benefits to firms, suppliers, consumers and employees?
A
Costs to suppliers
It is the monopsony power of supermarkets that has led to farmers losing their profits
Farmers lose out to supermarket price wars as monopolists able to negotiate lower prices, in order to lower their own prices and compete with other supermarkets
4
Q
A
