Weekend words M

Here's a word I learned just today: MONOPSONY [muh-NOP-suh-nee]. It only came into American vocabulary in the early twentieth century. And it came into my office earlier this morning via an economics professor who dropped by to tell me all about his favorite coffee. You are familiar with a monopoly, right? That's when there is only one seller of a particular item (like the city water company). Monopolizers can price their product pretty much as they please, because you can't get it anywhere else. A monopsony is a situation in which there is only one buyer for a particular product. Take for example, Wal-Mart--they have made deals with some small businesses to buy all of the products that business can produce. Sounds alluring, doesn't it? But what happens if WM decides they want to pay you a lower price? If you balk, they may move all their vast business to some other schmuck, so you agree, because there's no one else that can buy all that stuff you're producing. And besides, WM is going to price the product so low, you can't make a profit selling it to anyone else. There are laws regulating monopolies, but not monopsonies. So that's our economics lesson for the day, boys and girls.