A business using its bargaining power as a major buyer of labor to pay lower prices, including lower wages, is exerting _____ power.
A)compensating
B)union
C)monopsony
D)monopoly

Question

Quizplus · Accepted Answer

A monopsony occurs when there is only one buyer of a particular type of good or service. In the case of labor, a monopsony occurs when a business is the primary employer in a geographic area or industry, giving it significant bargaining power over the wages it pays to workers. Therefore, a business using its bargaining power as a major buyer of labor to pay lower prices, including lower wages, is exerting monopsony power.

A Business Using Its Bargaining Power as a Major Buyer