Imperfect Information
No sellers or buyers have complete market information, like market demand or market supply.
| Number of firms | Market power | Elasticity of demand | Product differentiation | Excess profits | Efficiency | Profit maximization condition | Pricing power | |
|---|---|---|---|---|---|---|---|---|
| Perfect Competition | Infinite | None | Perfectly elastic | None | No | Yes | P=MR=MC | Price taker |
| Monopolistic competition | Many | Low | Highly elastic (long run) | High | Yes/No (Short/Long) | No | MR=MC | Price setter |
| Monopoly | One | High | Relatively inelastic | Absolute (across industries) | Yes | No | MR=MC | Price setter |
Read more about this topic: Monopolistic Competition
Famous quotes containing the words imperfect and/or information:
“The law isn’t justice. It’s a very imperfect mechanism. If you press exactly the right buttons and are also lucky, justice may show up in the answer. A mechanism is all the law was ever intended to be.”
—Raymond Chandler (1888–1959)
“English literature is a kind of training in social ethics.... English trains you to handle a body of information in a way that is conducive to action.”
—Marilyn Butler (b. 1937)
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