oligopsony

n., pl., -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.]

oligopsonistic ol'i·gop'so·nis'tic (-nĭs'tĭk) adj.

(ol-i-GOP-suh-nee)

noun
The market condition where a few buyers control the market for a product.

Etymology
From Greek oligo- (few, little) + opsonia (purchase)

A word that shares the same prefix is oligarchy: government by the few, where political power is held by a small group and used for selfish and corrupt purposes.

Usage
"Does a joint Internet venture by the world's automakers to purchase parts amount to an illegal oligopsony--a cartel of buyers that can drive prices down through their market power?" — James V. Grimaldi; Trustbusters Put On a Stern Face; The Washington Post; Jun 29, 2000.

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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 Says:
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.

Related Links:
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Learn economics principles such as the relationship of supply and demand, elasticity, utility, and more! Economics Basics

Market situation in which a few large buyers control the purchasing power and therefore the output and market price of a good or service; the buy-side counterpart of Oligopoly. Oligopsony prices tend to be lower than the prices in a freely competitive market, just as oligopoly prices tend to be higher. For example, the large tobacco companies purchase all the output of a large number of small tobacco growers and therefore are able to control tobacco prices.

few buyers, many sellers

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