Can you think of any real-world examples of monopsonies? What are the disadvantages of monopsonies?

Can you think of any real-world examples of monopsonies? What are the disadvantages of monopsonies?

Answer:
monopsonies are one of those economic concepts that are created more so to fill in gaps in economic theory rather than because they are widely observed. Take giffen goods for example, they were observed once some centuries ago in the irish potato famine and never since. However i do think that in the case of teh arms trade you would have some for of monopsony (in countries where individuals arent allowed to bear arms) basically your single consumer would be your government and your single producer would probably be an agency licensed by the government. However, real life monopsonies cant be characterised by a single producer so probably the closest thing you would get to a monopsony would be a market with significant product differenciation.
elena? What is a monopsonie?
A monopoly is where only a single firm sells a product or service. A monopsony is where there is only a single consumer of a product. Just like a monopoly can artificially raise the price of its product or service, a monoponist can use its bargaining power to artificially lower the price.

It is hard, however, to come up with examples of a monopsonist. The US government might be a monopsonist because it is the only purchaser of defense equipment and supplies. Thus if it wanted to, the government could force defense suppliers to accept lower prices because it is the only buyer.
Government is the best example of a monopsony. Especially the military. The disadvantages of a monopsony are similar to those of a monopoly, since one part of the market is being singularly controlled. The only difference is that instead of the seller setting the price and market conditions, it is the buyer doing so. Instead of the buyers getting shafted, it is the sellers.

There tends not to be many monopsonies because if there is only one buyer, that means tere is not much demand. If there is not much demand, then why make the product? But, if the single buyer wants a lot of said product and is willing to buy it in mass, then you might have competition for said buyer and a market will exist, but only on the buyer's terms. So, you may have to be willing to take a loss in order to keep the buyer interested. If you take a loss at first and keep the buyer, you are taking a gamble that further down the road, through R & D you will be able to make the product more cheaply and eventually make a profit. You are also taking a gamble that the competition will lose interest in the buyer and the product so that eventually you will be the only seller of said product and that the competition will not be able to keep up with you because you know how to best make the product. Then as the only seller of the product you will have more leverage with the buyer and be able to negotiate a better price.

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