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An Automobile Company Enters into a Long-Term Contract with Two

question 55

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An automobile company enters into a long-term contract with two suppliers for the same automobile tool. This is to ensure the company is protected in the event one of the suppliers adopts an uncooperative attitude. Which of the following concepts is illustrated in this scenario?


Definitions:

Inclusive Unionism

The policy, pursued by industrial unions, in which a union attempts to include every worker in a given industry so as to be able to restrict the entire industry’s labor supply and thereby raise wages. Compare with exclusive unionism.

Industrial Unions

Labor unions that organize workers across a wide range of occupations within a single industry.

Monopsonist

A monopsonist is a market condition where there is only one buyer facing many sellers, allowing the buyer to exert significant control over prices.

Monopsonistic Employer

An employer who has significant control over the labor market and is the only or dominant buyer of labor, allowing them to influence wages and employment conditions.

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