Question

Name the market in which there is a single buyer and many sellers. Give an example.

Answer 1

The type of market structure in which there is a single buyer and many sellers is called and monopsony. In microeconomic theory of monopsony, a single entity is assumed to have market power over terms of offer to its sellers, as he is the only purchaser of the good or service. The classic case of monopsony is a “company town,” where one employer is the source of all jobs.