Monopsony

In economics, a monopsony is a market form with only one buyer, called "monopsonist", facing many sellers. It is an instance of imperfect competition, symmetrical to the case of a monopoly, in which there is only one seller facing many buyers. The term "monopsony" was first introduced by Joan Robinson (1933).

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A monopsonist has market power, due to the fact that he/she can affect the market price of the purchased good by varying the quantity bought. Formally, this is so because a monopsonist faces a supply curve with a finite (and generally positive) price elasticity. However, one can find this condition ? and hence monopsony power ? also in markets with more than one buyer. In all such cases the resulting market form is called an oligopsony.

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