What is the economist Joan Robinson’s theory on “Monopsony” exactly?
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A monopsony is the opposite of a monopoly. In a monopoly, only one producer is able to sell a given commodity and as a result can control its price.
In a monopsony, there could be multiple producers but only one entity buys them (or would want to buy them) so they control the price of said commodity.
The classic example is wages in a closed town of some kind, where there is only one employer. The wage set by the employer is not controlled by the multiple sellers of labour, the workers, but by the employer, who seeks to maximise profits can do so because they have that leverage.
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