What is Monopons?
Monopon is a situation where one buyer has to choose among many different retailers. The market of this type is the opposite of the monopoly, where a lonely seller offers goods and services to many buyers. Economists tend to consider Monopon as an example of imperfect competition because it has the potential to undermine the general stability of the economy and eventually lead to difficulties for the population in general.
One of the main dangers of Monopon is that the type of market conditions place great control in the hands of the buyer. Since the buyer has many different options in terms of purchases, it is possible to require lower prices from any of the suppliers. If the prices are too low, then some of the suppliers will not be able to earn sufficient profits from sales to cover production costs. When this happens, suppliers leave business, increasing the unemployment rate in places where the company maintained.
monopsThey can develop in almost any industry. For example, a retailer who is able to expel other retailers from business can soon become the main source of goods and services in the community due to their low prices. This condition allows a retailer to control lower prices from its suppliers. Without further buyers in this area, suppliers have no disability, but to observe the conditions of monoponists. At the same time, monopons can freely charge its customers any required price, because there is no competition in the immediate area.
One payer health care systems can also function as monopsons. This is especially true if no private care systems are able to compete with the government to the owned and operated health care system. If the government system is the only actual buyer of medical services in the area, hospital, health care of Pzavěs of various types and even medical offers have no choice but to observe dictated termsthe only buyer.
In many cases, monopons have great control in terms of determining wages for community where they operate. If there are no competitors to Monopon, then opportunities to work for people living in this area are very limited. The final result is that the only buyer can offer the lowest wages allowed by any government regulations, remain within the law and maximize its profits. Unfortunately, this also often means that the single buyer's employees live at the level of poverty and cannot collect the sources necessary to escape from their current circumstances by university education or vocational education that would allow them to find employment elsewhere.