What does monopsonistic mean?
Monopsonistic describes a market or relationship in which one buyer has a uniquely powerful position relative to sellers or workers. The term comes from monopsony, a situation analogous to a monopoly but from the buyer’s perspective: a monopoly has one seller, while a monopsony has one buyer. In a monopsonistic market, the buyer may be able to influence prices, wages, or working conditions because sellers have few alternative customers. The word is especially common in economics and industrial-relations discussions, including analyses of employer power and labour markets. It is distinct from monopolistic, which concerns seller power. Although “monopsonistic” can describe a market directly, it is also used for a buyer, firm, or arrangement characterized by this kind of imbalance.
adjectiveCharacterized by or relating to monopsony, especially a market in which there is only one buyer of a good or service. It may also describe a buyer with substantial power over sellers or suppliers.
- Characterized by monopsony or by the power of a single buyer over sellers.
"The monopsonistic buyer was able to impose lower prices on its suppliers because it was their only major customer."
"In a monopsonistic labour market, one large employer may exert substantial influence over wages."
"The report concluded that the industry had become increasingly monopsonistic."
If one seller controls the market, that is a monopoly; if one buyer controls it, that is a monopsony.
Reviewed by Deb Chak, Editor. AI-assisted content curated by RJS Tech Solutions LLP.
Where does monopsonistic come from?
Monopsonistic was formed from monopsony plus the suffix -istic. Monopsony combines the Greek prefix mono-, meaning “single” or “only,” with opsōnein, “to buy,” through the related form opsōnia, “a purchase.” The word therefore developed the sense of a market characterized by a single buyer. Its formation reflects a deliberate contrast with monopoly, which comes from Greek monos and the verb polein, “to sell.”
Related word forms
How monopsonistic is actually used
This is a specialized economics term. It is usually formal and is most often used in discussions of labour markets, procurement, bargaining power, and imperfect competition.
Easily confused with monopsonistic
Monopolistic describes a market or firm with only one seller, whereas monopsonistic describes a market or buyer with only one buyer.