Oligopsony market is the opposite of an oligopoly because there are few buyers and a large number of sellers. Buyers in this market have good knowledge about the products.
The word oligopsony is derived from the Greek word and is made up of two words, “oligop” meaning “few” and “sony” meaning “buyer”. When there are only a few buyers of a product in the market, it is called an oligopsony market.
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Meaning
Oligopsony is a market situation in which there are only a few buyers of a product and a large number of sellers. All sellers sell products to only a few buyers.
Features of oligopsony market
Following are the features of oligopsony market:
1. Few buyers:
In an oligopsony market, the number of buyers is less because only a few selected buyers are involved in this market and buyers have good knowledge about the products.
2. Large number of sellers:
There are a large number of sellers in this market. All sellers sell products to only a few buyers.
3. Substitute products
In this market, all the sellers sell the same type of products so there is a choice of products available.
4. Bargaining power:
In this market, buyers have bargaining power because there are few buyers and a large number of sellers in this market.
5. Selling Cost
Due to few numbers of buyers and large number of sellers there is more competition among the sellers due to which the seller has to spend more on advertising and promotion, hence the selling cost is higher in this market.
