Being the sole buyer, the monopsonist can set the price which he will pay. He need not fear that competitors will outbid him. But he cannot force people to accept a low price. Some people will accept whatever he offers because they have no better alternative, but others will refuse to sell if the price he sets is very low. The monopsonist accordingly must take note of the fact that if he sets a low price he will be able to buy only a little; if he wishes to buy more he will have to pay a higher price. He does, however, have the freedom to select the price, and the corresponding purchase quantity, which suits him best. The perfectly competitive buyer has no such option; he can buy only at the competitively determined price, although at that price he can buy all he likes. Under monopsony conditions, the selling price of a good will be lower, and less will be sold, than under competitive conditions.
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