Monopsony Flashcards
1
Q
What is a monopsony?
A
Few buyers, multiple suppliers
2
Q
How do monopsonists typically profit maximise?
A
they are price makers, they exploit their suppliers by driving down prices
3
Q
Give a benefit of monopsony to the firm itself
A
low costs, high revenue, high super normal profits
4
Q
Give a cost of monopsony to the firm itself
A
bad quality goods = selling cheaply
5
Q
Give a benefit of monopsony to the consumers
A
cheaper prices
6
Q
Give a cost of monopsony to the consumers
A
bad quality
7
Q
Give a benefit of monopsony to employees
A
(monopsony employee) Satisfycing
8
Q
Give a cost of monopsony to employees
A
(supplier employees) low wages or redundancy
9
Q
Give a benefit of monopsony to suppliers
A
fixed contracts
10
Q
Give a cost of monopsony to suppliers
A
low prices as exploited, loss of revenue
