Imperfect competition

In economic theory, imperfect competition is a type of market structure showing some but not all features of competitive markets.[1]

Forms of imperfect competition include:

  • Monopolistic competition: A situation in which many firms with slightly different products compete. Production costs are above what may be achieved by perfectly competitive firms, but society benefits from the product differentiation.
  • Monopoly: A firm with no competitors in its industry. A monopoly firm produces less output, has higher costs, and sells its output for a higher price than it would if constrained by competition. These negative outcomes usually generate government regulation.
  • Oligopoly: An industry with only a few firms. If they collude, they form a cartel to reduce output and drive up profits the way a monopoly does.
    • Duopoly: A special form of Oligopoly, with only two firms in an industry.
  • Monopsony: A market with a single buyer and many sellers.
  • Oligopsony: A market with a few buyers and many sellers.

References

  1. ↑ O'Sullivan, Arthur; Sheffrin, Steven M. (2003). Economics: Principles in Action. Upper Saddle River, New Jersey 07458: Pearson Prentice Hall. p. 153. ISBN 0-13-063085-3.

Other references

  • Massimiliano Vatiero (2009), "An Institutionalist Explanation of Market Dominances". World Competition. Law and Economics Review, 32(2):221-6.
This article is issued from Wikipedia. The text is licensed under Creative Commons - Attribution - Sharealike. Additional terms may apply for the media files.