The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.

-What is the term for a market structure in which there is only one buyer?
A)Monopoly.
B)Absolute advantage.
C)Monopsony.
D)Natural monopoly.

Question

The first 3 columns of the following table show data for a representative firm in an industry.The last 3 columns show the market demand and supply for the type of labour employed by this firm.
 
-What is the term for a market structure in which there is only one buyer?
A)Monopoly. 
B)Absolute advantage. 
C)Monopsony. 
D)Natural monopoly.

Quizplus · Accepted Answer

A monopsony market structure is characterized by only one buyer, which has significant market power to influence the price and quantity of goods and services traded in the market. This firm can dictate the wage rate paid to workers in the labor market, leading to a reduction in wages below the competitive level. In this scenario, the firm can hire more workers at a lower cost than it would have done in a competitive market. Thus, if there is only one buyer in a market, it is a monopsony.

The First 3 Columns of the Following Table Show Data