What is the definition of monopsony in economics?

A monopsony in economics is a market situation where there is only one buyer for a particular good or service, which gives that buyer significant control over prices and terms. This is different from a monopoly, where there is only one seller. For example, imagine a small town with only one factory that hires workers. Since the factory is the only employer, it can set lower wages because workers have no other job options. This situation can lead to less competition for labor, which often results in lower pay and fewer benefits for the workers.