question archive When there is only one buyer of a particular good or factor of production in the market, the buyer is known as a
When there is only one buyer of a particular good or factor of production in the market, the buyer is known as a
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When there is only one buyer of a particular good or factor of production in the market, the buyer is known as
a. a monopolist.
b. an oligopolist.
c. a monopsonistic competitive industry.
d. a monopsonist.
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The correct answer is d. a monopsonist.
In a monopsony market, there is only one firm in the industry that hires a certain factor of production, such as labor. In this case, the firm buys labor at a wage rate that is lower than that of a competitive factor market. The buyer of a good can have monopsony too if there is only one large buyer of a particular product. The buyer controls the market and determines the quantity that firms need to produce.
