Imperfect competition

Question 1

Imperfect competition suppliers

Answer 1

They may exert control over the quantity of goods and services supplied and exploit their monopoly power by having control over market prices

Question 2

Imperfect competition consumers

Answer 2

They may have monopsony (buying power) against suppliers because they purchase a high percentage of total demand.

Question 3

Imperfect competition barriers to contestability

Answer 3

Far from being homogenous; most markets are full of heterogenous products due to product differentiation.

Question 4

Imperfect competition rationality

Answer 4

Most consumers have imperfect information and preferences are influenced by persuasive marketing

Question 5

Imperfect competition related markets

Answer 5

There may be imperfect competition in related markets such as the market for key raw materials, labour and capital goods.