monopsony
muh-NOP-suh-nee
/məˈnɒpsəni/
A market structure in which there is only one single buyer for a particular product or service.
Focuses on buyer power over suppliers or workers, allowing the single buyer to suppress purchasing prices or wage rates.
The story behind the word. Coined by British economist Joan Robinson in her landmark 1933 book 'The Economics of Imperfect Competition'. She created the word from Greek 'monos' (single) and 'opsonia' (purchasing food/provisions) to describe the mirror image of a monopoly on the buyer's side.
Word relationships
- buyer's monopoly: 'Buyer's monopoly' is an informal descriptive phrase, whereas 'monopsony' is the precise technical economic term.
- monopoly: Monopoly is a market dominated by a single seller, whereas monopsony is dominated by a single buyer.
Commonly confused with
- monopoly: Monopoly controls supply (seller); monopsony controls demand (buyer).
Word family
- monopsonist (noun): A single buyer that dominates a market.
- monopsonistic (adjective): Pertaining to or characterized by a monopsony.
Collocations
- monopsony power
- buyer monopsony
- monopsony in labor
- pure monopsony
Example sentences
- "When a single company town is the sole employer for coal miners, it acts as a monopsony in the local labor market." Labor economics paper
- "Sugar beet farmers often face a monopsony because transporting heavy beets to distant refineries is economically impossible." Agricultural policy
Memory hook
MONO (single) + PSONY (sounds like purchasing) = Single purchaser. MonopSONY = PURCHASING power.
When not to use
Do not use to describe a firm that controls sales to consumers; monopsony applies exclusively to buyers.
Fun facts
- Defense manufacturers often face a monopsony because national governments are legally the only permitted buyers of high-grade military hardware.
Related words
Explore more words
monopoly, monopolize, price-fixing, exclusivity, monograph, monoculture
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