Question:
In a market structure in which there are only few buyers ________.
In a market structure in which there are only few buyers ________.
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Remember the roots of these terms:
- "-poly" = Seller (e.g., Monopoly = 1 seller, Oligopoly = few sellers).
- "-psony" = Buyer (e.g., Monopsony = 1 buyer, Oligopsony = few buyers).
- "-psony" = Buyer (e.g., Monopsony = 1 buyer, Oligopsony = few buyers).
Updated On: Jul 21, 2026
- Monopsony
- Oligopsony
- monopolistic competition
- Oligopoly
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The Correct Option is B
Solution and Explanation
Step 1: Understanding the Concept:
Market structures are classified based on the number of buyers and sellers, which determines their level of market power and influence over prices.
Detailed Explanation:
Let us define the economic terms used in the options:
- Oligopsony (B): A market structure characterized by a few large buyers who purchase from many sellers.
Because there are only a few buyers, each buyer possesses significant market power and can influence the prices and terms of the goods they purchase. This structure is common in agriculture, where a few large food processing companies buy raw crops from many independent farmers.
- Monopsony (A): A market structure with only one buyer who has complete control over the market price.
- Oligopoly (D): A market structure characterized by a few sellers who dominate the market.
- Monopolistic Competition (C): A market structure characterized by many sellers offering differentiated products.
Step 2: Final Answer:
A market structure with only a few buyers is called an Oligopsony.
Market structures are classified based on the number of buyers and sellers, which determines their level of market power and influence over prices.
Detailed Explanation:
Let us define the economic terms used in the options:
- Oligopsony (B): A market structure characterized by a few large buyers who purchase from many sellers.
Because there are only a few buyers, each buyer possesses significant market power and can influence the prices and terms of the goods they purchase. This structure is common in agriculture, where a few large food processing companies buy raw crops from many independent farmers.
- Monopsony (A): A market structure with only one buyer who has complete control over the market price.
- Oligopoly (D): A market structure characterized by a few sellers who dominate the market.
- Monopolistic Competition (C): A market structure characterized by many sellers offering differentiated products.
Step 2: Final Answer:
A market structure with only a few buyers is called an Oligopsony.
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