When there is only one buyer and one seller of the product, it is called a ______ situation.

Question

YESPYQ · Accepted Answer

Correct answer: b) Bilateral monopoly. A bilateral monopoly involves a single buyer (monopsony) and a single seller (monopoly) of a product. It's like a tug-of-war between the buyer and seller, each having significant market power. Think of a labor union, which monopolizes labor supply, negotiating with a monopsonist, a single large employer in a town. The dynamics involve intense bargaining power struggles due to the limited options available. The buyer and seller have considerable influence over the price and quantity of the product or service. This scenario often leads to complex negotiations and sometimes even to inefficient outcomes. Hence, the correct answer is "Bilateral monopoly."

When there is only one buyer and one seller of the product, it is called a ______ situation.

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