A _______ has _______ power if it faces a(n) _______ curve for a factor of production.

Question

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A buyer has monopsony power if it is the sole or dominant buyer of a factor of production. Monopsony power is characterized by an upward-sloping supply curve for the factor of production, meaning that as the buyer demands more of the factor, the price they must pay also increases. Option A is incorrect because a buyer with monopoly power would face a downward-sloping supply curve, as they can control the price of the product. Option B is incorrect because a seller with monopoly power would face an upward-sloping demand curve, as they can control the quantity sold at a given price. Option D is incorrect because a horizontal supply curve indicates perfect competition, not monopsony power.

A _______ Has _______ Power If It Faces A(n) _______

A ___ Has _ Power If It Faces A(n) _____