Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
A market structure where a single buyer dominates the market
B
A market structure with many buyers and one seller
C
A market with many sellers and few buyers
D
A situation where multiple buyers have equal power
Understanding the Answer
Let's break down why this is correct
Answer
A monopsony is a market situation where there is only one buyer for a product or service, which gives that buyer significant power over prices and terms. This means that the single buyer can set lower prices, as sellers have no alternative buyer to turn to. For example, if a large factory is the only employer in a small town, it can pay workers less because they have no other job options nearby. This can lead to lower wages and fewer benefits for workers, affecting their overall well-being. Understanding monopsonies helps us see how buyer power can shape the economy in ways that might not always be fair to sellers.
Detailed Explanation
A monopsony is when one buyer controls the market. Other options are incorrect because This option suggests many buyers and one seller; This option describes many sellers and few buyers.
Key Concepts
Monopsony definition
Topic
Understanding Monopsonies
Difficulty
easy level question
Cognitive Level
understand
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