If all professional baseball teams collude to reduce the wages paid to players,they are acting as
A)a pure monopsony.
B)a pure monopoly.
C)a labor union.
D)a pure oligopoly.

Question

Quizplus · Accepted Answer

A monopsony occurs when there is only one buyer in a market for a particular good or service. In this case, the professional baseball teams are the only buyers of the players' labor services. If they collude to reduce wages, they are acting as a pure monopsony. This is different from a pure monopoly, which occurs when there is only one seller in a market for a particular good or service. The teams are not acting as a labor union, which would represent the players' interests and negotiate for higher wages. A pure oligopoly would involve a small number of buyers or sellers, but not necessarily collusion to reduce wages.

If All Professional Baseball Teams Collude to Reduce the Wages