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      Question

      Which of the following correctly defines the term

      ‘monopsony’? 
      A A single enterprise is being supplier of a particular commodity or service Correct Answer Incorrect Answer
      B An industry being dominated by a small group of large suppliers Correct Answer Incorrect Answer
      C An industry being dominated by small group of buyers Correct Answer Incorrect Answer
      D A single buyer substantially controlling the market Correct Answer Incorrect Answer
      E None of these Correct Answer Incorrect Answer

      Solution

      Explain:   A monopsony is a market condition in which there is only one buyer, the monopsonist. It is a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers. An oligopoly is a market structure in which a few firms dominate. When a market is shared between a few firms, it is said to be highly concentrated. A monopoly contains a single firm that produces goods with no close substitute.

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