Monopsony

noun (countable and uncountable)

/məˈnɒpsəni/

A market structure in which a single buyer (or a dominant buyer) faces many sellers, giving that buyer substantial power to set prices below the competitive equilibrium — the buyer-side analogue of a monopoly. In Indian labour markets, monopsonistic conditions arise when a single large employer — such as a public-sector undertaking, a plantation company, or a large aggregator platform — is the dominant purchaser of a particular type of labour in a region, enabling it to depress wages. The Economic Survey 2023–24 highlighted platform-economy monopsony as an emerging challenge for gig-worker wage determination.

✍️ Usage in a UPSC answer

India's MGNREGS, by guaranteeing statutory wage rates, acts as a countervailing policy instrument against the monopsony power of large landowners in rural casual-labour markets.

Synonyms

buyer's monopolysingle-buyer marketpurchasing monopolydominant-buyer marketoligopsony (partial equivalent)

Antonyms

monopolycompetitive marketperfect competitionpolypsony

🌱 Word Family

monopsonist (noun), monopsonistic (adjective), monopsony power (noun phrase), oligopsony (noun)

🔡 Root

Greek monos = single, alone; Greek opsōnein = to buy provisions (from opson = food, relish purchased); -y = noun suffix

📜 Etymology

Coined in 1933 by British economist Joan Robinson in her landmark work The Economics of Imperfect Competition, drawing on classical Greek components. Robinson constructed the term by analogy with monopoly (monos + pōlein, to sell), substituting opsōnein (to buy) for the selling root. Its application expanded from agricultural commodity markets to labour economics and digital platform analysis in the 21st century.

🧠 Memory Hook

MONOpsony = ONE buyer — just flip monopoly: instead of one seller controlling the market, one buyer controls it. Visualise a single APMC (mandi) being the only purchaser of a farmer's produce, dictating the price — that mandi has monopsony power.

💰 Indian Economy 📖 Seen in: Indian Economy — Growth, Planning & De...

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