Duopsony
An economic condition, similar to a duopoly, in which there are only two large buyers for a specific product or service. Sometimes referred to as a buyer's duopoly, members of a duopsony have great influence over sellers and can effectively lower market prices for their supplies. Investopedia Says:
For example, let's imagine a town in which only two restaurants operate. There are only two employment options for waiters and chefs. Because the restaurants have less competition for finding employees, they can offer lower wages. The chefs and waiters have no choice but to accept the low pay, unless they choose not to work. This shows that firms that are part of a duopsony have the power not only to lower the cost of supplies, but also to lower the price of labor. Related Terms:
Duopoly
Monopoly
Monopsony
Oligopoly
Oligopsony
Perfect Competition
Price Fixing |