Differentiate between monopoly and monopsony. Give an example for each – InterviewSolution

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1.

Differentiate between monopoly and monopsony. Give an example for each.

Answer»

Basis	Monopoly	Monopsony
1. Meaning	It is a market structure in there exists only a single seller of a product who is the sole producer of the product which has no close substitutes.	It is a market structure in which there exists only a single buyer of a product in the market.
2. Example	Indian Railways which is owned by the Government of India.	In a village one textile mill purchase cotton from the farmers of that village. So the textile mill is the monopsony firm which is the only buyer of cotton produced by the farmers of the village.

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