Which of the following correctly describes a monopsony?
A)A monopsony firm is the sole supplier of an input.
B)In a monopsony market,two or more firms set output assuming the other's output is constant.
C)A monopsony firm is the sole buyer in an input market.
D)In a monopsony market,a group of firms collude to set prices.

Question

Quizplus · Accepted Answer

A monopsony is a market structure in which there is only one buyer of a particular product or service. Therefore, a monopsony firm is the sole buyer in an input market. Choice A describes a monopoly, choice B describes a duopoly, and choice D describes a cartel.

Which of the Following Correctly Describes a Monopsony