Some points of the characteristics of monopsony are discussed below. Monopsony has both advantages and disadvantages for the buyers and sellers which is to be noted down. Monopsony is a type of imperfect market.
- Single large buyer
- Resource ownership
- Barriers to entry
- No alternative buyer
- Monopsony is a form of iperfect competition
- Buyer buys material with lower price
- Single buyer faces many sellers
- Monopsony has the bargaining power in the market as there is no other buyer
- Monopsony exists in both the product and labour markets
- Also check out advantages and disadvantags of monopsony to know more about it.
- The reduced cost of purchasing imput increases their profit margin
- Some elasticity of labour or supplier