In a monopsony, which of the following best describes the market power of the single buyer in the factor market?

In a monopsony, there is only one buyer in the market for a particular factor of production, like labor. This single buyer has significant market power because they can influence the price of the factor they are purchasing. For example, if a town has only one factory hiring workers, that factory can set lower wages since workers have no alternative employer to turn to. This means the factory can pay less than what would be expected in a competitive market, leading to lower overall wages for workers. The factory's control over wages demonstrates how a monopsonist can dominate the factor market by limiting choices for workers.