oligopsony

American  

[ol-i-gop-suh-nee] / ˌɒl ɪˈgɒp sə ni /

noun

1. the market condition that exists when there are few buyers, as a result of which they can greatly influence price and other market factors.

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oligopsony British  

/ ˌɒlɪˈɡɒpsənɪ /

noun

1. a market situation in which the demand for a commodity is represented by a small number of purchasers

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Other Word Forms

• oligopsonistic adjective

Etymology

Origin of oligopsony

First recorded in 1940–45; olig- + Greek opsōnía “purchase of provisions, shopping”

Explanation

An oligopsony is a market where many people are selling a product, but only a few are buying it. In farming, for instance, thousands of small farmers may have only a few giant supermarket chains to sell their products to. Oligopsony stems from the Greek oligoi, meaning "few," and opsonia, "to buy." In an oligopsony, the buyers control the market. Because there are so many sellers competing for the business of so few buyers, the buyers can dictate low prices. It is the functional opposite of an oligopoly, in which a few sellers control the market for a product that a lot of people are buying.