In economics

Economics

Economics is the social science that analyzes the production, distribution, and consumption of goods and services. The term economics comes from the Ancient Greek from + , hence "rules of the house"...

, a monopsony is a market form in which only one buyer faces many sellers. It is an example of imperfect competition

Imperfect competition

In economic theory, imperfect competition is the competitive situation in any market where the conditions necessary for perfect competition are not satisfied...

, similar to a monopoly

Monopoly

A monopoly exists when a specific person or enterprise is the only supplier of a particular commodity...

, in which only one seller faces many buyers. As the only or majority purchaser of a good or service, the "monopsonist" may dictate terms to its suppliers in the same manner that a monopolist controls the market for its buyers.

A monopsony is a market condition where multiple sellers, [the majority of sellers in that market] all have to sell to the same individual buyer because that buyer is buying a significant portion of the entire market.