OLIGOPSONY Meaning and
Definition
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Oligopsony, derived from the Greek words "oligo" meaning "few" and "psono" meaning "to buy," is a concept in economics that refers to a market condition where a small number of buyers or firms have significant market power and control the purchasing of goods or services from a larger number of sellers.
In an oligopsonistic market structure, the relatively small group of purchasers has the ability to influence and dictate the terms of trade, including prices, quantity demanded, and conditions of supply. This advantage stems from the limited number of competitors in the market, which reduces the options available to the sellers. Consequently, the buyers often possess stronger bargaining power and can exert significant control over producers, suppliers, and the overall market dynamics.
Oligopsony is often characterized by a few dominant buyers who set the terms of the transaction, thereby influencing the market prices and reducing competition among sellers. This type of market power can lead to adverse consequences such as reduced output, lower prices for suppliers, and potential exploitation of sellers. Oligopsonistic practices may result in barriers to entry, restrict market access for potential buyers or suppliers, and hinder the overall efficiency of the market.
Understanding oligopsony is crucial for policymakers to assess market competition and ensure consumer welfare. Recognizing and monitoring oligopsonistic practices can aid in the identification of potential anti-competitive behavior, safeguarding against unfair trade practices, and promoting a more equitable and efficient market environment.
Common Misspellings for OLIGOPSONY
- iligopsony
- kligopsony
- lligopsony
- pligopsony
- 0ligopsony
- 9ligopsony
- okigopsony
- opigopsony
- ooigopsony
- olugopsony
- oljgopsony
- olkgopsony
- ologopsony
- ol9gopsony
- ol8gopsony
- olifopsony
- olivopsony
- olibopsony
- olihopsony
- oliyopsony
Etymology of OLIGOPSONY
The word "oligopsony" is derived from two Greek roots: "oligo", meaning "few", and "opsōnía", which refers to the purchase of food or provisions. The term was first coined by economists in the early 20th century to describe a market structure wherein a small number of buyers have significant control over the purchase of a particular product or service. It is the opposite of "oligopoly", which refers to a market structure with a few dominant sellers.
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