2. Monopsony
•Single buyer faces many sellers
•A form of imperfect competition
•Buyer buys material with lower
price
•A monopsony has buying or
bargaining power in their market.
6. PRICING
•Depends upon the terms
dictated by the single large
buyer to whom the goods or
services is targeted at.
•The buyer is the price maker
7. Elasticity of Market Supply
If supply is highly elastic, monopsony power is
small and there is little gain in being the only
buyer.
8. DIFFERENCES BETWEEN MONOPOLY AND
MONOPSONY
MONOPOLY
• One seller and many buyers.
• High price output.
•Seller is the price maker
MONOPSONY
• One buyer and many sellers.
• Low price output.
• Buyer is the price maker .