How Do You Spell BILATERAL MONOPOLY?

Pronunciation: [ba͡ɪlˈatəɹə͡l mənˈɒpəli] (IPA)

Bilateral monopoly (/baɪˈlætərəl məˈnɒpəli/) refers to a situation where a single buyer and a single seller are the only two parties involved in a transaction. The spelling of the word is comprised of two parts: bilateral, meaning "involving two parties", and monopoly referring to a market controlled by a single seller. The IPA phonetic transcription shows how the word is pronounced, with the stress on the second syllable of "bilateral" and on the first syllable of "monopoly".

BILATERAL MONOPOLY Meaning and Definition

1. Bilateral monopoly is an economic concept that refers to a market structure where a single buyer and a single seller exist. It is a combination of two market structures, namely perfect competition and monopoly. In a bilateral monopoly, there is only one dominant buyer and one dominant seller who interact and negotiate directly with each other.

   The buyer in a bilateral monopoly has monopsony power, meaning they possess the ability to control the quantity demanded and set the purchase price. On the other hand, the seller has monopoly power, enabling them to control the quantity supplied and set the selling price. This imbalance of power between the buyer and seller creates a unique dynamic in the market.

   The key characteristic of a bilateral monopoly is the presence of negotiations and bargaining between the buyer and seller. Since there is no direct competition, both parties are incentivized to negotiate to maximize their own interest. These negotiations often revolve around issues such as price, quantity, quality, and delivery terms.

   Bilateral monopolies can lead to inefficiencies compared to more competitive market structures. The lack of competitive pressures may limit the incentives for the buyer and seller to offer the most efficient prices and quantities, potentially resulting in higher prices and lower quantities compared to a perfectly competitive market. The outcome of a bilateral monopoly is heavily influenced by the relative bargaining power of the buyer and seller and their ability to reach an agreement that suits both parties' interests.

Etymology of BILATERAL MONOPOLY

The term "bilateral monopoly" is a combination of two words: "bilateral" and "monopoly".

The word "bilateral" is derived from the Latin word "bilateralis", which is composed of "bi-" meaning "two" and "lateralis" meaning "of or belonging to the side". This signifies the involvement of two parties or sides in a bilateral relationship or agreement.

The word "monopoly" comes from the Greek words "monos" meaning "alone" or "single" and "polein" meaning "to sell". A monopoly refers to a situation where a single entity or firm has exclusive control over the supply of a particular product or service, thereby dominating the market.