Imperfect competition

Question 1

define imperfect competition

give an example

Answer 1

a market where firms have some control over pricing and production bc they face imited competetion.
includes **fewer sellers, product differentiation and some barriers to entry **
example include monopolistic competition and oligopolies

coca cola

Question 2

what are the benefits of imperfecrt competititon?

Answer 2

1) product variety
2) innovation incentives (bc they have the resources)
3) EOS (by firms are mostly large)

Question 3

what are the disadvantages?

Answer 3

1) higher prices, above marginal costs
2)