WBCS.LIVE practice question

A market structure characterized by a single buyer and many sellers is known as what?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Monopoly
  2. Oligopoly
  3. Monopolistic competition
  4. Monopsony

Correct answer and explanation

Correct answer: Monopsony

Explanation: āœ… Correct Answer: D) Monopsony šŸ“š Explanation: A monopsony exists when there is only one dominant buyer in a market interacting with numerous independent sellers. In this microeconomic structure, the single buyer holds significant market power and can dictate the price of the goods or services being purchased. A classic example is a company town where a single massive factory is the sole employer of local labor.