Banking Term: Bilateral Monopoly

Find important banking term that is useful in upcoming banking exam.

Jun 9, 2015 15:48 IST

• Bilateral Monopoly is a market in which a single seller (a Monopoly) is confronted with a single buyer (a Monopsony). Under these circumstances, the theoretical determination of output and price will be uncertain and will be affected by the interdependence of the two parties.

• A market that has only one supplier and one buyer. The one supplier will tend to act as a monopoly power, and look to charge high prices to the one buyer.

• Large companies would essentially monopolize all the jobs in a single town and use their power to drive wages to lower levels.

Examples of Bilateral Monopoly

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