A monopsony restricts the quantity of a factor demanded to force down the price of the factor and increase profits.

Name: A monopsony restricts the quantity of a factor demanded to force down the price of the factor and increase profits.
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In a monopsony, the buyer has market power over the suppliers, and can restrict the quantity demanded to drive down the price of the factor. This allows the monopsonist to lower their costs of production and increase profits.

A Monopsony Restricts the Quantity of a Factor Demanded to Force