AP MicroeconomicsFactor Markets
Monopsony
A monopsony is a market structure with a single buyer and many sellers, giving the buyer market power.
In a monopsony, the single buyer can influence the price of the product by changing the quantity it purchases. This allows the monopsonist to pay a lower price than in a competitive market. Monopsony power can arise in factor markets, such as a large employer in a small town.
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