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Economics unit 3 > Monopsony > Flashcards

Flashcards in Monopsony Deck (7)
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1
Q

Characteristics

A

Profit maximisers

Same as a monopolistic market

2
Q

Where will a monopsony seek to buy at?

A

0E because they are the only buyer in the market hey can. In a perfectly competitive market it would buy at a higher price. However suppliers will not be happy with this so the quantity will drop.

3
Q

What does the upward sloping supply curve mean

A

Monopsonists will have to pay a higher price if they want more. The MC of buying more is higher than the average price.

4
Q

How it affects the supplier

A

Likely to lose out
Price paid for good falls
Less supplied because price falls
Change markets e.g farmer grows something else

5
Q

Effect on customer

A

Lower costs lead to lower prices
Depends
May be restrictive in supply

6
Q

Bilateral monopoly

A

When a Monopsonist faces a monopoly market

7
Q

Definition and example

A

When there is only one buyer in the market

Government dominates the market for the hiring of teachers.