Monopsony | A-Level Economics Notes
These revision notes cover everything you need to know about Monopsony for A-Level Economics. They're designed for students studying Edexcel A-Level Economics and Edexcel International A-Level Economics. Written by Jaisul Naik, UCL Economics graduate and A-Level Economics tutor since 2017.
What is a monopsony?
A monopsony is a firm that can exploit their market power when buying factors of production.
This allows them to under-pay and under-employ factors of production.
What are the advantages of monopsonies to suppliers?
Suppliers are unaffected if they are a monopoly.
What are the disadvantages of monopsonies to suppliers?
Supplies would see a decrease in revenue if monopsony power increases. This can also lead to suppliers having to shutdown.
What are the advantages of monopsonies to customers?
Monopsonies have lower costs, therefore they can provide lower prices to consumers.
What are the disadvantages of monopsonies to customers?
Customers may see a decrease in quality. As monopsonies squeeze suppliers, they may take shortcuts.
Summary questions
- What is a monopsony?
- What are the advantages of monopsonies to suppliers?
- What are the disadvantages of monopsonies to suppliers?
- What are the advantages of monopsonies to customers?
- What are the disadvantages of monopsonies to customers?
A-Level Economics Tutoring
I offer one-to-one and small group A-Level Economics tutoring for students across the UK and internationally. With 87+ five-star Google reviews and tutoring experience since 2017, I specialise in helping students understand difficult concepts and improve their exam technique.