When there is only one buyer in a product market, a seller in the market:
A)has great market power in the monopoly market.
B)has no opportunities in substitute markets.
C)may be pressured to sell at a lower price than if there were many buyers.
D)is able to sell at a higher price than if there were many buyers.

Question

Quizplus · Accepted Answer

When there is only one buyer in a product market, the seller may be pressured to sell at a lower price than if there were many buyers as the buyer has more bargaining power in the market. This is because the seller has no other options to sell their product and is dependent on the one buyer for their sales. Therefore, the seller's market power is significantly reduced in a monopoly market with a single buyer.

When There Is Only One Buyer in a Product Market