How is a monopsony defined?

Question

Quizplus · Accepted Answer

A monopsony is a market situation where there is only one buyer for a particular product, service, or factor of production. This buyer has substantial market power to negotiate lower prices and can affect the market price of the good or service being purchased. Therefore, option A is the best choice as it correctly defines monopsony. Option B is incorrect as it refers to a labor union that represents only one type of worker. Option C is incorrect as it refers to a monopoly where there is only one seller, and option D is incorrect as it refers to a bilateral monopoly where there is only one buyer and one seller.

How Is a Monopsony Defined