Word of the Week – May 7, 2022

Monopsony

[mə-NAHP-sə-nee]

Noun

Greek, 1930s

Economics – a market situation in which there is only one buyer.  From the Greek suffix “mono” meaning “one” and the Greek “opsōnein,” meaning “buy provisions.”  Monopsony can be easily mistaken with “monopoly,” but they have somewhat inverse definitions.  While a “monopsony” is a fiscal condition in which there is only one buyer of a good or service, a “monopoly” is a situation in which there is only one producer of a good or service.  Economic theory proposes that monopsonies can lead to lower wages for workers because they are paid less than their marginal revenue product.

Example: Elon Musk’s recent purchase of Twitter is proof the ultra-rich have been granted a monopsony over the media by the U.S. Congress.

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