Question

The market situation where there is only one buyer in the market is called

• A. Monopoly
• B. Monopsony
• C. Perfect market
• D. Monarchy

Hint:

Remember the differences in market terms:
- "Mono-poly" = One Seller (poly- = seller).
- "Mono-psony" = One Buyer (opsonia- = buying).

Answer 1

The Correct Option is B

Step 1: Understanding the Concept:
Market structures are classified based on the number of buyers and sellers in the market, which affects pricing power and competition.

Step 2: Detailed Explanation:
Let us define the economic terms listed in the options:
- Monopoly:
A market structure where there is only one seller of a product or service, giving the seller significant control over prices (e.g., a utility company).
- Monopsony:
A market structure where there is only one buyer facing many sellers.
In this situation, the single buyer has significant bargaining power and can influence the price of goods or services.
A common example in agriculture is when many small-scale fish farmers must sell their harvest to a single processing plant or middleman in a remote region.
This matches the definition provided in the question.
- Perfect Market (Perfect Competition):
An idealized market structure with many buyers and sellers, where no single participant can influence prices.
- Monarchy:
A political system of government led by a king or queen, which is not an economic market structure.
Therefore, a market with only one buyer is called a monopsony.

Step 3: Final Answer:
A market structure with only one buyer is a monopsony.
Thus, the correct choice is (B).