5.4 Monopsonistic Markets

• What is a monopsonistic market structure characterized by?

  Only one buyer
• In a monopsonistic market, there is only one buyer and many sellers.
• What type of influence does a monopsony have on price in the market?

  Significant influence
• A monopsony is a market structure with only one buyer
• Match the market structure with its characteristic:

  Monopsonistic Market ↔️ One buyer

  Competitive Market ↔️ Many buyers

  Market Power in Monopsony ↔️ High

  Market Power in Competition ↔️ None
• Monopsonistic markets have only one buyer and no market power.

  False
• Why does the supply curve in a monopsonistic market slope upward?

  To attract more suppliers
• In a monopsony, total cost is calculated as $TC =$$P \cdot Q$, where $P$ is price and $Q$ is quantity
• The demand curve in a monopsonistic market slopes upward.

  False
• Why does marginal expenditure exceed average expenditure in a monopsony?

  To purchase additional units
• A monopsony is a market structure where there is only one buyer
• What is a key characteristic of monopsonistic markets?

  Single buyer
• In a competitive market, there is only one buyer and high market power.

  False
• What is the relationship between price and quantity in the supply curve of a monopsonistic market?

  Direct relationship
• In a monopsony, total cost is calculated asTC = P \cdot Q</latex>, where $P$ is price
• Why does the supply curve slope upward in monopsonistic markets?

  To attract more suppliers
• In a monopsonistic market, there is a single buyer
• The supply curve in a monopsonistic market is typically horizontal.

  False
• What is the formula for total cost in a monopsony?

  $TC =$$P \cdot Q$
• The demand curve in monopsonistic markets slopes downward
• How do monopsonies use their market power to influence prices?

  Lower them
• What does the marginal expenditure curve represent in monopsonistic markets?

  Cost of additional unit
• The marginal expenditure curve lies below the supply curve in monopsonistic markets.

  False
• What is the profit maximization condition in a monopsony?

  $ME =$$MB$
• A monopsony's market power allows it to dictate lower prices for goods or services.
• What is the key difference between demand curves in monopsonistic and competitive markets?

  Monopsony influences price
• Where does the marginal expenditure curve lie in relation to the supply curve in monopsonistic markets?

  Above it
• What is the profit maximization condition in monopsonistic markets?

  $ME =$$MB$
• In a competitive market, firms maximize profit when P = MC</latex>.
• A large steel mill in a small town uses monopsonistic power to dictate wages.
• A monopsonistic market has only one buyer
• Monopsonistic markets have limited influence on price compared to competitive markets.

  False
• What type of market power do monopsonies possess?

  High
• What is monopsonistic exploitation?

  Paying workers less than their marginal revenue product
• The welfare effects of monopsonistic markets include reduced consumer and producer surplus.
• Match the stakeholder with its impact in a monopsonistic market:

  Producers ↔️ Reduced surplus

  Consumers ↔️ Lower quantity purchased
• Give an example of a monopsonistic market in the labor market.

  Large steel mill in a small town
• Monopsonistic markets occur when there is only one buyer
• What is an example of a monopsonistic labor market?

  A large steel mill
• In a competitive market, prices are significantly influenced by a single buyer.

  False