User:MiloKing/Determination PQ Monopsonist SR

Relevant discussion may be found on the talk page.|} Note: this article is eventually intended to become a companion to Determination of price and quantity supplied by monopolistic firm in the short run. This article describes the process by which a monopsonist firm, i.e., a firm that is the only firm buying a particular commodity, selects the quantity to purchase and the price to set for the commodity. Monopsonists are usually either firms who have a monopsony in the market for one of their inputs or non-firm buyers who have a monopsony in some consumption good they choose to buy. In the former case, there is a prominent subcase of labor monopsony, in which a firm is the only employer in a certain labor market. This is especially relevant when examining minimum wages applied to such firms. In this article, we consider several different types of monopsony buyers

Non-firm monopsonists

Some monopsonists are not firms who possess a monopsony in one of their input markets. Some are just individual buyers purchasing consumption goods. As with the other cases, we are trying to determine the price the buyer pays and the quantity they purchase. In this case, the relevant factors are the buyer's willingness to pay for an additional unit and the cost to the buyer of buying an additional unit (called the marginal revenue cost in the other cases). The latter factor is derived from the supply curve.