Question

Villagers in a village are occupied mainly in beekeeping. They sell their product only to firm X.

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

Answer 1

1. Monopsony: Firm X is the sole buyer of the villagers’ product.
2. It is a buyer's market because the single buyer can influence the buying price, while the beekeepers have no alternative buyer for their product.