Monopsony Defined
Monopsony refers to a market where there is one buyer and multiple sellers. It is similar to monopoly, but in reverse. It is an example of excessive competition and few buyers where competition to win the purchasing power of that single buyer is so strong that it could spell disaster for many competitors, forcing them out of the market. An example of this is the issue of four new free newspapers suddenly appearing in their boxes on city streets side by side, equally as good and equally as enticing to readers; one of the four newspapers will not be able to survive due to unfair numbers of competitors.