Examples of Monopsonies:

Monopsonies are a rare and very abstract term that can be hard to understand if we don't look at examples in real life. To start, we can look at monopolies to understand what a monopsony is. When looking at monopolies, we understand that there is one seller selling to many different buyers, which allows the seller to spike up the price as there is no one else selling. Monopsonies are markets where this are many sellers, however, there is only one buyer. Because of this, the firm can then drive down the price of the product according to the amount of quantity desired.

To further understand monopsonies, it is helpful to look at an example. Most monopsonies occur labor markets, where specialized workers can only work at one specific firm, meaning the firm can drive down wages as they are the only firm that will hire the worker. This often happens in the technology industry, where companies like Cisco and Oracle have been accused of working together to drive down the price. This relates to what we learned about with the NBA and the NFL as the players can get paid less than they believe they are valued. An example of monopsony with products and services is typically found with government products. While there are three different suppliers of fighter jets, the government is the only one who is legally allowed to purchase the fighter jets from the firms, meaning they can drive down the price. This also occurs for many other products the government buys too. Overall, monopsonies are basically just the opposite of monopolies, with one buyer and many sellers, and mostly occurs in labor markets or with government spending.











https://www.investopedia.com/terms/m/monopsony.asp