Question

The main occupation of the villagers in a village is beekeeping. The villagers sell their produce only to firm X.

1. Identify the type of market prevalent here.
2. Is it a buyer’s market or a seller’s market? Give a reason.

Answer 1

1. The market type here is monopsony, with only one buyer (Firm X) and multiple sellers (villagers).
2. It is a buyer’s market because Firm X, as the sole buyer, has greater control over price and purchasing terms, giving sellers limited bargaining power.