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Monopsony

When a single buyer controls the market for a particular good or service, in essence setting price and quality levels, normally because without that buyer there would not sufficient demand for the product to survive.

Monopsony is a market structure in which there is only one buyer of a good or service. This means that the buyer has a lot of power over the price that they pay for the good or service.

Monopsony power can be exercised in a number of ways. For example, the buyer can offer a lower price for the good or service than would be possible in a competitive market. Or, the buyer can require suppliers to accept certain terms and conditions, such as longer contracts or lower quality standards.

Monopsony power can harm consumers and suppliers. Consumers may have to pay higher prices for goods and services, and suppliers may have to accept lower prices or worse terms and conditions.

There are a number of businesses that have monopsony power. One example is Walmart. Walmart is the largest retailer in the United States, and it buys a lot of goods and services from suppliers. This gives Walmart a lot of power over the prices that it pays for these goods and services.

Another example is the government. The government is a major buyer of goods and services, such as military equipment, construction services, and food. This gives the government a lot of power over the prices that it pays for these goods and services.

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