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A monopsony is a
market condition

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in which there's only one
buyer, the monopsonist.

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In a monopsony a
single buyer generally

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has a controlling advantage that
derives its consumption price

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down.

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Unlike a monopoly, where single
seller controls a market,

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in a monopsony a single
buyer dominates the market.

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Monopsonists are common to
areas where they supply most

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or all of the region's jobs.

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They're also common
in labor markets

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where single employer has an
advantage over the workforce.

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Monopsonists commonly
benefit from low prices

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from wholesalers, that's
because like a monopoly,

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a monopsony does not
adhere to standard pricing

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from balancing supply side
and demand side factors.

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And because many sellers
buy for its business,

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the buyer uses its size
advantage to obtain low prices.

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In order to drive down the cost
to the employer and increase

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profit margins, employees
often agree to lower wages.

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Economists and policymakers,
have increasingly

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become concerned
with the domination

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of just a handful of companies
controlling an outsize market

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share in a given industry.

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The long term fear is
these monopsony industry

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giants will influence
pricing power

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and exert their ability to
suppress industry wide wages.

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