In the context of economics, which of the following best defines a monopsony?

A monopsony is defined as a market structure where there is a single buyer that exerts significant control over the market. This buyer has the power to influence prices and the quantity of goods purchased because they are the primary source of demand in that market. In this situation, the lack of competition among buyers can lead to lower prices for sellers, which is a key characteristic of monopsonistic markets.

For instance, in a labor market, if a single employer is the dominant buyer of labor in a particular area, that employer can dictate the wage levels and working conditions, as workers have limited options for employment. This allows the monopsonist to maximize their own utility by minimizing costs.

Other options describe different market structures that do not apply to the definition of a monopsony. A market with many sellers and few buyers indicates competition among sellers, while a competitive market highlights many buyers and sellers with no significant market power. A market with high barriers to entry refers to the difficulty potential competitors face when trying to enter a market, which does not inherently relate to the concept of monopsony.