Question
Bilateral monopoly refers to the market situation of
Answer: Option A
Answer: (a)
In a bilateral monopoly, there is both a monopoly (a single seller) and monopsony (a single buyer) in the same market. The one supplier tends to act as monopoly power and looks to charge high prices to the one buyer. The lone buyer looks towards paying a price that is as low as possible.
Since both parties have conflicting goals, the two sides negotiate based on the relative bargaining power of each, with a final price settling in between the two sides’ points of maximum profit.
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Answer: (a)
In a bilateral monopoly, there is both a monopoly (a single seller) and monopsony (a single buyer) in the same market. The one supplier tends to act as monopoly power and looks to charge high prices to the one buyer. The lone buyer looks towards paying a price that is as low as possible.
Since both parties have conflicting goals, the two sides negotiate based on the relative bargaining power of each, with a final price settling in between the two sides’ points of maximum profit.
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