Walmart is the world’s largest retailer. As a consequence, it has sufficient bargaining power to push its suppliers to lower their prices so it can honor its slogan of “Save Money—Live Better” for its customers.

a. Is Walmart acting like a monopolist or monopsonist when purchasing goods from suppliers? Explain.

b. How does Walmart affect the consumer surplus of its customers? The producer surplus of its suppliers?

c. Over time, what is likely to happen to the quality of products produced by Walmart suppliers?