Imperfect competition Definition
In economic theory, imperfect competition, is the competitive situation in any market where the conditions necessary for perfect competition are not satisfied.
Forms of imperfect competition include:
- Monopoly, in which there is only one seller of a good.
- Oligopoly, in which there is a small number of sellers.
- Monopolistic competition, in which there is many sellers producing highly differentiated goods.
- Monopsony, in which there is only one buyer of a good.
- Oligopsony, in which there is a small number of buyers.
There may also be imperfect competition in markets due to buyers or sellers lacking information about prices and the goods being traded.