A)Who has more monopoly power---Wal-Mart or the concessionaire who has acquired the franchise to sell beer, hot dogs, colas, candy, etc., at a Washington Redskins football game? Explain.
B)Who has more monopsony power---Wal-Mart or teams in the National Football League (NFL) that are negotiating with players from college football teams that the teams just have drafted?
A) To determine who has more monopoly power, we need to consider the level of control each entity has over the market they operate in. Monopoly power refers to the ability of a company or individual to dominate a particular market or industry.
In this case, Wal-Mart is a multinational retail corporation operating in various markets and selling a wide range of products. While Wal-Mart has a significant market presence and brand recognition, it faces competition from other retailers selling similar products. Therefore, while Wal-Mart holds considerable market power, it may not have an absolute monopoly in any specific industry.
On the other hand, the concessionaire who holds the franchise to sell beer, hot dogs, colas, candy, etc., at a Washington Redskins football game likely operates in a more limited and localized market. They may have exclusive rights to sell their products within the stadium during the football games. As a result, the concessionaire might have a higher degree of monopoly power within that specific market.
To understand the exact extent of monopoly power, it would be necessary to consider factors such as the level of competition, market share, entry barriers, and the ability to set prices independently. Additionally, legal and licensing restrictions may further impact the monopoly power of each entity.
B) To determine who has more monopsony power, we need to evaluate the ability of each entity to dominate the market as the sole or primary buyer.
While Wal-Mart is a prominent retailer with substantial purchasing power, it operates in a competitive market where it buys products from various suppliers. It does not solely dominate the supply of goods in any specific industry or sector.
On the other hand, teams in the National Football League (NFL) that are negotiating with players from college football teams they just drafted might possess a higher level of monopsony power. The NFL teams have exclusive rights to negotiate with the players they draft, giving them leverage in contract negotiations. This exclusivity allows the teams to exert control over the supply of talent and potentially influence the terms of the agreements.
Factors such as the availability of alternative buyers, the bargaining position of the sellers, and the extent of control over the market will determine the level of monopsony power. It is worth noting that the NFL as a whole has mechanisms in place to ensure a certain level of parity and competition for player signings, which may limit the monopsony power of individual teams to some extent.