The best example of a monopsonist is?

Question

These are the chocies. Please explain how you got answer....
A. AT&T
B. Ford Motor Company
C. the Teamster's Union
D. a large army post located in a small community.

Answer 1

I would say D, though it's the closest, not the exact definition.

Monopsony is a state in which demand comes from one source. If there is only one customer for a certain good, that customer has a monopsony in the market for that good. A Monopsonist would be the monopsonist.

The army would be the demand for supplies and the soldiers who buy from the suppliers in the city. However, the army base would get other supplies from other area, thus ruining the Monopsonist theory.

AT&T is no longer a monopoly, so a monopsonist ideal does not exist in its model. Same for Ford, and the Teamsters.

My best example would be Hewlett Packard and a mini corporation set up inside. HP at one time went to buy a spring used in a light bulb. The company for the light bulb would sell the bulb for 5¢ or the spring for 10¢ HP though this was robbery and idscovered that they could set up a company to buy the bulbs, smash them and then pull out the springs for LESS than the 10¢ charge from the company. The small company HP set up has a Monopsonist set up in that it had ONE company buying the springs from it.