Oligopsony

What does it mean?
A market similar to an oligopoly, but where a small number of large buyers (not sellers) control a large proportion of the market and drive prices down.

In Other Words...
A good example of oligopsony could be the tomato market. There might be only a couple large companies who purchase from growers. Therefore, they have the ability to drive prices down. The growers are in tough, because if they don't sell at the lower price then they risk not selling their tomatoes at all.

Related Links
Antitrust Defined - Check out the history and reasons behind antitrust laws, as well as the arguments surrounding them.

Economics Basics Tutorial - Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more!

Related Terms
Monopoly | Monopsony | Oligopoly

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