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 between Wal-Mart and the concessionaire at a Washington Redskins football game, we need to consider a few factors. Monopoly power refers to the ability of a firm to influence market conditions, set prices, and exclude competitors.
In the case of Wal-Mart, they are a retail giant with a significant market presence in various locations, selling a wide range of products. They possess a large market share and enjoy economies of scale, giving them substantial control over prices, suppliers, and consumer choices in their specific industry.
On the other hand, the concessionaire at a Washington Redskins football game operates within a much smaller market. Their monopoly power is limited to the stadium or venue where the game takes place. They may hold exclusive rights to sell certain products, such as beer, hot dogs, colas, candy, etc., within the premises. However, their market power is restricted to that specific event, and their influence does not extend beyond the stadium.
Considering these factors, it is evident that Wal-Mart holds more monopoly power than the concessionaire. Wal-Mart's dominance in the retail industry and their extensive reach give them a significantly higher level of control over prices, suppliers, and consumer choices compared to the concessionaire's limited monopoly power in a specific venue.
B) To determine who has more monopsony power between Wal-Mart and the teams in the National Football League (NFL) in negotiating with college football players, we need to consider the concept of monopsony power. Monopsony power refers to the market power of a buyer (rather than a seller) to determine the terms of trade, including prices and conditions.
In this case, the teams in the NFL act as buyers negotiating with college football players whom they have drafted. The NFL teams, collectively, can be seen as a monopsony in the market for professional football players. They hold significant bargaining power due to factors such as their exclusive rights to negotiate contracts with drafted players and the limited number of professional teams compared to the number of college players seeking to enter the league.
Comparatively, Wal-Mart's monopsony power is limited in the context of negotiating contracts with players. While Wal-Mart is a significant buyer in many product markets, they do not have similar market power when it comes to negotiating contracts with college football players.
Therefore, in this scenario, the NFL teams hold more monopsony power than Wal-Mart, as they have more control over the terms and conditions of contracts with college players who aspire to join the professional league.