"A retailer who is both a monopolist and a
monopsonist may be liable to different classes of plaintiffs--both to downstream consumers and to upstream suppliers--when the retailer's unlawful conduct affects both the downstream and upstream markets," he wrote in the majority opinion.
American defense market: first, the federal government is an imperfect
monopsonist and second, the supplier side of the market is insufficiently competitive to allow for effective price discrimination.
(284) Just as the monopolist seeks to maximize profits by equating marginal cost and marginal revenue, the
monopsonist tries to equate marginal outlay with marginal revenue.
Elaborating on one of his earlier publications on the topic (Mera, 2010), he argues that, when dealing with a producer, monopoly and monopsony are separable from each other only in so far as there could exist perfect competition on the other markets--that is, either the factor markets in case of a monopolist or the output markets in case of a
monopsonist. Since perfect competition never exists, a producer is always both a monopolist and a
monopsonist, or indeed neither of the two.
The
monopsonist is often rendered powerless to set prices.
(15) Thus, even as a labor market
monopsonist pushes the market wage down, it perceives a marginal cost of labor that is higher than that wage.
Finally, variables that measure the bargaining power of the agent would be the degree of unionization of labor force in a company or location, and whether the principal is a
monopsonist (e.g., sole employer for all workers) in the local labor market.
As a result, the increased leverage gave the state a perverse incentive to act as a single buyer, or
monopsonist, which allowed it to negotiate prices down and set terms with far more advantage to itself than would be the case in a competitive market.
To paraphrase the author, the minimum wage eliminates the
monopsonist employer's ability to influence workers' wages.
The
monopsonist will choose, in the absence of minimum wages, extremely high capital intensity.
If, on the other hand, the internalization market is not competitive, then internalizers are the
monopsonist equivalent of oligopolists and may have the market power to pay less for order flow than what they make above their costs (plus a market return on capital) from executing orders at a slight improvement over the NBO and NBB.
(11.) Although the sole buyer on the domestic market for weapons, the government does not act like a typical
monopsonist because of the way taxes, military budgets, and in many cases procurement contracts are determined ahead of time.
