ol⋅i⋅gop⋅so⋅ny
[ol-i-gop-suh-nee] 
ɪˈgɒp
| the market condition that exists when there are few buyers, as a result of which they can greatly influence price and other market factors. |
Based on the Random House Dictionary, © Random House, Inc. 2009.
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| ol·i·gop·so·ny (ŏl'ĭ-gŏp'sə-nē, ō'lĭ-) n. pl. ol·i·gop·so·nies A market condition in which purchasers are so few that the actions of any one of them can materially affect price and the costs that competitors must pay. [olig(o)- + (mon)opsony.] ol'i·gop'so·nis'tic (-nĭs'tĭk) adj. |
Copyright © 2009 by Houghton Mifflin Company.
Published by Houghton Mifflin Company. All rights reserved.
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Oligopsony
Similar to an oligopoly (few sellers), this is a market in which there are only a few large buyers for a product or service. This allows the buyers to exert a great deal of control over the sellers and can effectively drive down prices.
Investopedia Commentary
A good example of an oligopsony would be the U.S. fast food industry, in which a small number of large buyers (i.e. McDonald's, Burger King, Wendy's) controls the U.S. meat market. Such control allows these fast food mega-chains to dictate the price they pay to farmers for meat and to influence animal welfare conditions and labor standards.
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See also: Demand, Economics, Monopoly, Monopsony, Oligopoly, Supply
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oligopsony
- A market in which a limited number of buyers follow the leadership of a single large firm. For example, in a town or region, a large bank may set rates on certificates of deposit that are then adopted by smaller banks and savings and loan associations on their own certificates of deposit. Compare oligopoly.
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