remember previous window javascript

Monopsony in economics

Monopsony refers to a market form in which there is a single buyer of a product or service. In contrast to a monopoly, which relates to a single seller, a monopsony is characterized by a single powerful buyer that can dictate prices and terms to suppliers.

For example, in some labor markets a single large employer may be the dominant buyer of a particular type of labor. This gives the employer monopsony power over workers, allowing them to suppress wages below what they would be in a more competitive market. Some industries that have been analyzed through the lens of monopsony power include meatpacking and hospital care.

Another example is that of healthcare providers in some rural areas. With only one hospital within reasonable distance, doctors and nurses have little choice but to accept the terms and pay offered by that single hospital. This gives the hospital monopsony power over the local labor market for medical professionals.

So in summary, monopsony refers to a market situation where there is a single dominant buyer that is able to leverage its position to obtain favorable prices or terms from suppliers, similar to how a monopoly can influence sellers as the dominant provider. It is a useful economic concept for understanding labor markets and other industries with concentrated buyer power.