Definition of 'Monopsony'
Monopsony power can lead to higher prices for consumers. This is because the monopsonist can set the price of the product or service and the sellers have no other choice but to accept it. This can lead to lower output and less innovation, as the monopsonist has no incentive to lower prices or improve the product or service.
Monopsony power can also lead to lower wages for workers. This is because the monopsonist can set the wages for workers and the workers have no other choice but to accept it. This can lead to lower living standards for workers and less economic growth.
There are a number of ways to address monopsony power. One way is through government regulation. For example, the government could set a maximum price for the product or service or require the monopsonist to negotiate with the sellers. Another way to address monopsony power is through collective bargaining. If the workers are able to unionize, they can negotiate with the monopsonist as a group and have more bargaining power.
Monopsony power can have a significant impact on the economy. It can lead to higher prices for consumers, lower wages for workers, and less innovation. There are a number of ways to address monopsony power, including government regulation and collective bargaining.
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