Bilateral monopoly means

🔑Key Points:
A bilateral monopoly exists when a market has only one supplier and one buyer.
The one supplier will tend to act as monopoly power and look to charge high prices to the one buyer.
The lone buyer will look towards paying a price that is as low as possible.
Since both parties have conflicting goals, the two sides must negotiate based on the relative bargaining power of each, with a final price settling in between the two sides' points of maximum profit.
This climate can exist whenever there is a small contained market, which limits the number of players, or when there are multiple players but the costs to switch buyers or sellers is prohibitively expensive.
One example occurs when a labor union (a monopolist in the supply of labor) faces a single large employer in a factory town (a monopsonist).