Bilateral monopoly

A bilateral monopoly is a market structure consisting of both a monopoly (a single seller) and a monopsony (a single buyer).^[1]

Bilateral monopoly is a market structure that involves a single supplier and a single buyer, combining monopoly power on the selling side (i.e., single seller) and monopsony power on the buying side (i.e., single buyer). This market structure emerges in situations where there are limitations on the number of participants, or where exploring alternative suppliers is more expensive than dealing with a single supplier. In a bilateral market, both buyers and sellers aim to maximize their profits. Although the seller may attempt to increase the product prices as the only supplier, the buyer can still negotiate for the lowest possible price since the seller has no other buyers to sell to.