What is Bilateral Monopoly Market? Meaning, Features, and More.

हिंदी में पढ़ें:

First of all, we need to understand the “monopoly market” and “monopsony market” because the bilateral monopoly market is a combination of both.

Monopoly Market: A monopoly market is a market (situation) in which there is only one seller and a large number of buyers. A single seller controls all market activities in his jurisdiction. There are no close substitutes for the products available in this market.

Monopsony Market: Monopsony market is a market (situation) in which there is only one buyer and a large number of sellers. In this market, all the sellers sell the product to only one buyer and the buyer has good information about the product.

In this market, the features of both markets are found like one seller, one buyer, no close substitute, bargaining, etc. In this market, the seller acts as per the buyer because the seller provides the same product as the buyer says, but the opposite also happens because sometimes the seller provides the product to the buyer on his own behalf as well. In this market, the better the relationship between the two parties, the better results can be seen.

What is Bilateral Monopoly Market? Meaning, Features, and More.

Table of Contents

What is Bilateral Monopoly Market?

A bilateral monopoly market is a market (situation) in which there is only one buyer and seller. It is a combination of the “monopoly market” and “monopsony market”. In this market, both are dependent on each other because there is only one seller who sells the product and only one buyer who buys the product. This market is rarely seen, and bargaining is high in this market because the buyer wants to buy the product cheaply and the seller wants to sell the product expensively.

A bilateral monopoly market is a market in which there is only one buyer and seller.

In this market, there are no close substitutes for the product available because there is only one seller who sells the product but there is also no substitute for the seller because there is only one buyer. In this market there is more agreement between the two parties as both are dependent on each other, if both do not agree with each other, they may suffer loss to themselves.

Features of Bilateral Monopoly Market

Following are the features of bilateral monopoly market:

1. Only One Buyer and Seller:

In a bilateral monopoly market, there is only one buyer and seller because this market is formed when there is only one buyer and seller. The seller sells the product to only one buyer and the buyer buys the product from only one seller. In this market, there is no option for the buyer and similarly, there is no option for the seller.

2. Dependency:

In this market, both parties are dependent on each other as there is only one seller and buyer available in the market for a specific product. The seller sells the product to only one Buyer and the buyer also buys the product from only one Seller. If the buyer does not buy the product and the seller does not sell the product then the purpose of this market will not be fulfilled due to which this market will not be formed.

3. No Substitute:

There are no close substitutes of the product in this market because only one seller sells a particular product because only, he has the right to sell that particular product. If someone sells a product without permission, he may be punished. Just as the buyer has no substitutes for the product, similarly the seller also has no substitutes for the buyer.

4. A Negotiation:

Bargaining is more prevalent in this market because there is only one seller and one buyer of a product. The seller has only one buyer and the buyer has only one seller due to which both do not want the deal to be canceled, that is why bargaining takes place to get the deal done, but it is not necessary that it happens all the time.

5. Low Selling Cost:

In this market, both the parties know who is the seller and buyer of a particular product due to which there is no need to spend on selling expenses like advertising and promotion, hence the selling cost is very low in this market.

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QNA/FAQ

Q1. What is bilateral monopoly market?

Ans: A bilateral monopoly market is a market (situation) in which there is only one buyer and seller. It is a combination of the “monopoly market” and “monopsony market”.

Q2. Is there only one buyer and one seller in a bilateral monopoly market?

Ans: Yes, in a bilateral monopoly market, there is only one buyer and one seller.

Q3. Are both parties dependent on each other in a bilateral monopoly market?

Ans: Yes, in a bilateral monopoly market, both parties are dependent on each other because there is only one buyer and seller of the particular product.

Q4. Is negotiation found in the bilateral monopoly market?

Ans: Yes, negotiation is found in the bilateral monopoly market.

Q5. Is there no close substitute for the product in a bilateral monopoly market?

Ans: Yes, in a bilateral monopoly market, there is no close substitute for the product because there is only one seller of the product.

Q6. Write the features of the bilateral monopoly market.

Ans: Following are the features of bilateral monopoly market:

1. There is only one buyer and seller.
2. Both parties are dependent on each other.
3. There are no close substitutes for the product.
4. Negotiation/bargaining is more common.
5. Selling costs are low.

This Post Has One Comment

  1. Tarhib 4 July 2024 Reply

    Your explanation of bilateral monopoly markets is clear and insightful. You’ve effectively outlined the dynamics, features, and implications of this complex economic concept. Thank you for providing such a thorough overview!

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