GK
BUSINESS ECONOMICS
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Two rival buyers only
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Two rival sellers only
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A monopolist facing a monopsonist
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A monopoly seller buying his input from many suppliers
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Detailed explanation-1: -A bilateral monopoly is a situation in which there is a single buyer and a single seller. Hence, the term bilateral monopoly refers to that market situation in which a single seller confronts a single buyer. Hence, it is also called as monopoly (single seller)-monopsony (single buyer) situation.
Detailed explanation-2: -Both a monopoly and a monopsony refer to a single entity influencing and distorting a free market. In a monopoly, a single seller controls or dominates the supply of goods and services. In a monopsony, a single buyer controls or dominates the demand for goods and services.
Detailed explanation-3: -A monopsony is when a firm is the sole purchaser of a good or service whereas a monopoly is when one firm is the sole producer of a good or service. Most examples of monopsony have to do with the purchase of workers’ time in the labor market, where a firm is the sole purchaser of a certain kind of labor.