An imperfect market
Characteristics of an imperfect market The characteristics of an imperfect market are different from those of a perfectly competitive market. In an imperfect market, there are various barriers to entry, few competitors, and differentiated products. Here are some of the common characteristics of an imperfect market: Market power: Firms in an imperfect market have some degree of market power, which means they can influence the market price by adjusting their level of output. They may have the ability to set prices above their marginal cost and earn economic profits. Barriers to entry: There are significant barriers to entry in an imperfect market, which prevent new firms from entering the market and competing with existing firms. These barriers can include legal restrictions, high start-up costs, access to distribution channels, and intellectual property rights. Product differentiation: In an imperfect market, firms often sell differentiated products, which means that each firm's ...