1. Get with one partner
Its 1960, and NASA is going
to be buy a rocket and
soliciting proposals with
private companies to build a
the new rocket. NASA will be
the ONLY buyer of rockets.
Put together a 5 part
proposal, including price, for
the project for NASA to buy.

2. How is this different than the other 4
market structures we learned?
• Buyers/sellers
• Barriers to entry
• information
•
•
•
•
Oligopoly
Perfect Competition
Monopolistic competition
Monopoly

3. Monopsony Market structure
• Somewhat rare
• Many sellers, only 1 buyer
• Few barriers to enter supply
market
• Very expensive or special
products being purchased
• Monopsony power comes from
size of the firm, bigger the more
buying power, lower prices for
buyer
• “Market share”

4. Monopsony Market Examples
• Larger employer, small town
– Mining towns like Morenci,
Winkelman and Bisbee
• Baseball players before 1974

5. Monopsony Market Examples
• Amazon on book market (70%)
• Walmart on clothing & goods
• Healthcare in United Kingdom
– Market in USA?
• Firms with considerable
economies of scale
• How could sellers work to
increase price of their factor?