Economics • Economic BasicsEasy
Which of the following constitutes 'Monopsony' in a market?
A. A market with many buyers and a single seller
B. A market with a single buyer and many sellers✓ Correct Answer
C. A market with two dominant sellers
D. A market with government price controls on essential commodities
💡 Solution & Explanation
A monopsony represents a market structure characterized by a single buyer facing many independent sellers, giving the buyer significant market power to influence purchase prices. A market with many buyers and a single seller is termed a monopoly, whereas a duopoly features two dominant sellers. Understanding market structures is essential for answering questions in microeconomics.
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