When only one buyer has access to a particular labor market,
A)A monopoly exists.
B)There is no seller concentration.
C)A monopsony exists.
D)There is no buyer concentration.

Question

Quizplus · Accepted Answer

When only one buyer has access to a particular labor market, it creates a situation of monopsony, where there is only one buyer and numerous sellers. This gives the monopsony buyer significant bargaining power over the labor market and can lead to a lower wage rate and less employment than in a competitive labor market. Therefore, option C is the correct answer.

When Only One Buyer Has Access to a Particular Labor