Why are egg prices so high? | Legal Analysis

oh let's not get too complicated you know I'm trying to run a money losing business here um okay so so here's the deal um I I'm actually serious in the fact that I'm a lawyer I'm going to try to synthesize the topic in a fun way to see if everybody understands I'm basically using you guys as like a guinea pig jury okay all right can we get it right okay so uh in today's class we're going to learn what a monopsony is anybody know no that's Monopoly that's actually very close this is great A monopsony is a buide monopoly so like Monopoly like the board game when you play Monopoly you know towards the end everything gets so expensive all the other players get wiped out of the market right because one person owns everything nobody can afford anything a monopoly is a sside entity a monopsony is what happens when a monopoly is on the buy side okay so it occurs when there's one single entity in a particular Market that has particular market dominance and buying power okay let me give you an example let's say I go to my wife and I say honey I want to start and only fans she says okay but you can only sell your photos to me I go okay fine starting my only fans I'm charging $100 a photo she's going to laugh and say there is no way I'm going to pay $50 an inch and let's be real it's at least $33 an inch you know but you were torts and she says okay I'll pay you $5 for your photo in this particular instance I'm in the only fans Market but I can only sell to one person that one person can set the price of what they're going to buy at because they're the only one I can sell to right so in this particular situation my wife and that's actually a picture of my wife is a monopsonist okay let's go to example two so example two I go to my wife and I say hey honey I'm going to start an only fans she says okay but the only people that you can sell your only fans photo to is me and my identical clones now when I was creating this hypothetical I almost said other women um but I only have two inches to spare and I like uh yeah so my wife has five identical clones each equally as beautiful and um I go to her and I say okay great I can sell to you and the Clones $100 a photo she then goes back to the clones and says all right girls here's the deal we're going to tell him that we're only going to buy the photos for $5 they have created a monopsonist cartel okay are we following all right next example three in example three only fans Tom is not only fans Tom he is engineer Tom he is specifically a rocket scientist a rocket engineer I don't know what they do that sounds really smart but he's a rocket scientist and my wife is a rocket scientist employer okay this is particularly relevant because while my wife might not be the only person in the market there's only a handful of companies in the world that can meaningfully employ rocket scientist right like Walmart isn't going to employ rocket scientist it's going to be SpaceX NASA locky Martin there's only a handful of them okay so I go to my wife and I say hey wife/ rocket scientist employer I want a job I want to be making $150,000 a year she responds okay let me go check the market data she then goes to her fellow colleagues the rocket scientist cartel and she says okay gang what are we paying rocket scientists they say we're paying $100,000 right are we following so my wife comes back and says sorry we can't pay you $150,000 we can pay you $100,000 because that's what the market commands and I can't go shop or have leverage in that negotiation because the other four meaningful rocket scientist employers all pay $100,000 because they're all sharing data with each other in an anti-competitive Market because if it was truly a competitive market then they wouldn't share labor and labor would rise right if I if it

was a bidding war for the top talent rather it's an artificial depression of the market this is a labor market monopsony are we following is this somewhat entertaining it might not be funny but is it interesting okay example four now uh Tom only fans Tom is a farmer specifically an egg farmer okay and my wife is Rachel Mart she's the single largest buyer of eggs in the country okay that's her store Rachel Mart I go to her I say okay hey Rachel Mart you're going to pay me a dollar an egg she says no I say no problem I'm going to go to the market I participants I say okay hey everybody I'm trying to sell my eggs for a dollar and we have a buyer specifically Red Hat Rachel which is a Rachel e right she says I'll buy your eggs for a dollar go great in response Rachel Mart comes back to me and says okay you're right not only am I going to pay you a dollar I'll pay you a buck 25 but you have to buy all I get to buy all of your eggs I have no problem with that I just wanted a dollar now you're paying me a buck 25 Rachel Mart also goes to all the other Toms in the market and inks the same deal all right so year one year two year three year four all of the other Mark all the other Market competitors get out of the market because I'm only selling to Rachel Mart so now I have nobody to sell my eggs to Rachel Mart then comes to me and says hey 25 cents an egg I say no I'll go shop the market I can get a better price elsewhere but I can't because all the other egg buyers are out of the market okay are we following all right so uh I have no choice as egg farmer Tom I have to sell for 25 cents an egg or I go out of business no vertical bu so you're saying I as an egg farmer open up I open up bies as my poor egg farmer self this is good I mean I this is this is exactly the kind of feedback that I want there as the average egg farmer going to have that capacity to do it probably not that that's my feeling too so this is what we call an agricultural monopsonist next Rachel Mart's going to claim hey we get the cheapest eggs this is good for the consumer right well the consumer price of the egg is going to go from $1 to $2 to $3 to $4 to $5 and that statement that it is still the cheapest egg is still accurate and the reason for that is because there's no other competition in the market right because Tom can't sell his eggs to BU IES or whoever and so there's no price competition at the other level so my question is do you punish Rachel Mart because this is very similar to a case that I'm working on tar tariff they're internal this is an internal issue if you're on a jury and Rachel Mart's saying I'm a capitalist Enterprise this is just capitalism or do you say hey is that anti-competitive is this a violation of the Sherman Act or The Clayton Act antitrust no meaningful feedback I told you this was an experiment you're getting your shot don't worry you know my answer you don't punish Rachel Martin okay you have to get rid of these monopolies that's what's destroying this nonsense it's happening to electricity companies to deal with you he and get rid of right so if you have exactly get out of here you make America pray to give you get rid of that's what a greedy bastard and monopsony so you have a new word now okay this is interesting this is the feedback that I'm want I'm totally gauging y'all's faces too even if you're not responding I'm just trying to get some details yes