Monopsony Structure
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A Monopsony Structure is a market structure characterized by a single buyer that controls market demand for particular goods or services.
- AKA: Single-Buyer Market, Monopsonistic Market, Buyer Monopoly.
- Context:
- It can typically exercise Buyer Power over suppliers through demand control.
- It can typically determine Input Prices through monopsony pricing power.
- It can typically create Supplier Dependence through exclusive purchasing relationships.
- It can typically reduce Input Quantities below competitive levels.
- It can typically generate Monopsony Rents through price suppression.
- ...
- It can often influence Wage Levels in labor markets through employment control.
- It can often affect Supplier Profitability through price-setting behavior.
- It can often create Market Inefficiency through deadweight loss.
- It can often limit Supplier Options through market dominance.
- It can often shape Production Decisions through purchasing requirements.
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- It can range from being a Pure Monopsony Structure to being a Partial Monopsony Structure, depending on its buyer concentration level.
- It can range from being a Natural Monopsony Structure to being an Artificial Monopsony Structure, depending on its formation cause.
- It can range from being a Regulated Monopsony Structure to being an Unregulated Monopsony Structure, depending on its regulatory oversight.
- It can range from being a Local Monopsony Structure to being a National Monopsony Structure, depending on its geographic scope.
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- It can be analyzed through Economic Welfare Analysis for efficiency loss.
- It can be regulated by Competition Authorities for market abuse.
- It can interact with Monopoly Structures to form Bilateral Monopoly Structures.
- It can emerge in Factor Markets with limited buyers.
- It can affect Income Distribution through factor payments.
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- Example(s):
- Labor Market Monopsony Structures, such as:
- Agricultural Monopsony Structures, such as:
- Government Monopsony Structures, such as:
- Resource Market Monopsony Structures, such as:
- ...
- Counter-Example(s):
- Monopoly Structure, which has single seller rather than single buyer.
- Oligopsony Structure, which has few buyers rather than single buyer.
- Perfect Competition Structure, which has many buyers and many sellers.
- Monopsony Power without Monopsony Structure, where buyer influence exists without complete control.
- See: Market Structure, Buyer Power, Oligopsony Structure, Bilateral Monopoly Structure, Labor Market, Market Power, Factor Market, Wage Determination.