Definition of 'Oligopsony'
Oligopsony can occur in a variety of industries, such as agriculture, healthcare, and manufacturing. In the agricultural industry, for example, there are a few large food processing companies that buy from many small farmers. This gives the food processing companies a lot of power, and they can often force farmers to sell their products at low prices.
In the healthcare industry, there are a few large insurance companies that buy health insurance from many small doctors and hospitals. This gives the insurance companies a lot of power, and they can often force doctors and hospitals to accept lower reimbursement rates.
In the manufacturing industry, there are a few large manufacturers that buy from many small suppliers. This gives the manufacturers a lot of power, and they can often force suppliers to sell their products at low prices.
Oligopsony can have a number of negative consequences for the economy. First, it can lead to higher prices for consumers. Second, it can lead to lower wages for workers. Third, it can lead to less innovation.
There are a number of things that can be done to address the problems of oligopsony. One is to increase competition in the market. This can be done by breaking up large companies, or by encouraging new entrants into the market. Another is to regulate the market. This can be done by setting price controls, or by requiring companies to disclose information about their pricing practices.
Oligopsony is a serious problem that can have a negative impact on the economy. However, there are a number of things that can be done to address the problems of oligopsony.
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