Step 1: Read the scenario.
Read the following scenario
You’ve probably heard of a monopoly, in which one powerful seller controls a market of many buyers. But have you ever heard of a monopsony?
A monopsony involves one powerful buyer and many sellers. The buyer is so powerful that it can drive prices down. An example is Walmart, the world’s largest retailer. Walmart’s power allows it to get the lowest possible prices from its suppliers. Similarly, wine-making giant Ernest & Julio Gallo has so much power buying grapes that growers have to concede to the wine maker’s demands for lower prices.
Step 2: Answer the questions.
Use a word processor (such as MS Word) and to write the answers to the following questions:
1. Is it fair that a buyer can exert so much power over a supplier? Are there any benefits to consumers?
2. Do you think the government should step in and set minimum price levels? Discuss the consequences of your answer.
Place an order of a custom essay for this assignment with us now. You are guaranteed; a custom premium paper being delivered within its deadline, personalized customer support and communication with your writer through out the order preparation period.