An imperfect market may be defined as the market in which prices of goods or services can easily be influenced by the sellers or buyers.
In other words, an imperfect market is a market situation in which the force of
demand and supply do not operate freely.
TYPES OF IMPERFECT MARKET
- Monopolistic Competition: This is a market situation in which there are many producers or sellers producing or selling identical but non-homogenous commodities. Good are not homogenous due to branding or use of trade- marks or the services offered may differ in quality.
- Oligopoly: This is an imperfect market in which there are few producers or sellers of the same commodity. Also known as colluding oligopoly.
- Duopoly: This is a market situation in which there are only two sellers or producers of commodity but there are many buyers.
- Monopsony: This is an imperfect market in which there is a single seller of a particular good or service.
CONDITIONS FOR IMPERFECT MARKET
- Heterogeneous commodity
- There is only one or very few buyers and or sellers
- There is an imperfect knowledge of market transactions
- There is no free entry into or exit from the market
- Preferential treatment exists
- No uniform prices
- There are transport costs involved in moving goods and factors of production
- Goods are not portable
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