Bilateral Monopoly  

Definition of Bilateral Monopoly: A Bilateral Monopoly occurs in an industry where there is only one producer of a good and only one supplier. It means there is a monopsonist (buyer of labour) and a monopoly (single supplier)

Examples of Bilateral Monopolies

  • Coal Mining Monopsonist facing a Trade Union. In a town the coal mine is the only employer of labour. But, there is only one supplier of labour from the trade union members

Diagram of Bilateral Monopoly



  • A Monopsony would pay a wage of W2 and employ Q2 workers- where MRP = MC.
  • A Trade Union could organised labour and bargain for higher wages of W3 – without causing a fall in employment.


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