Imperfect Market Competition Structures in the Economics

in hive-145160 •  2 years ago 

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An imperfect market competition structure refers to a market system in which the conditions for perfect competition are not met. This means that certain barriers prevent the market from reaching a state of perfect competition.

In this structure, the prices are determined by supply and demand, and there is no single firm or group of firms that has the power to influence market prices. Some of the common characteristics of imperfect market competition include the presence of barriers to entry, market power, and information asymmetry.

Examples of imperfect market structures include monopolistic competition, oligopoly, and monopoly. In monopolistic competition, there are many firms in the market, but each firm has some degree of market power, allowing it to set prices that are higher than what would be found in a perfectly competitive market.

In an oligopoly, a small number of firms control the market, and there is limited competition between these firms. In a monopoly, a single firm has complete control over the market and can set prices at will.

The "imperfect market" structures are commonly found in industries where there are high barriers to entry, such as in regulated industries, or where there are high costs associated with entering the market, such as in the case of natural monopolies.

These barriers can take the form of regulatory restrictions, proprietary technologies, or large economies of scale that make it difficult for new firms to enter the market and compete with existing firms.

Moreover, imperfect market competition structures are a common occurrence in many industries, and they often result in higher prices and reduced competition compared to what would be found in a perfectly competitive market.

Understanding the different types of imperfect market structures and their characteristics is important for policymakers, economists, and businesses as they strive to promote competition and ensure that markets operate efficiently and fairly

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@shahriar33

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It is sad we only have competition in small business as all large industries have merged into small groups. Those groups are owned by the same small shareholders that ask the managers to compete on management style (lower labor cost etc.) and not on price. Hence you have large companies never losing i.e., Coke and Pepsi existing for a hundred years and never knocked out by true competition.

Exactly, this is why the small firm can't compete with the large firms and bounds to leave the market. There is a solution though if they get protection from the government then it might be possible for them to survive. But unfortunately most of the time they don't get it.

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