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:
“Behind every individual closes organization; before him opens liberty,—the Better, the Best. The first and worse races are dead. The second and imperfect races are dying out, or remain for the maturing of the higher. In the latest race, in man, every generosity, every new perception, the love and praise he extorts from his fellows, are certificates of advance out of fate into freedom.”
—Ralph Waldo Emerson (1803–1882)
“Phenomenal nature shadows him wherever he goes. Clouds in the staring sky transmit to one another, by means of slow signs, incredibly detailed information regarding him. His inmost thoughts are discussed at nightfall, in manual alphabet, by darkly gesticulating trees. Pebbles or stains or sunflecks form patterns representing in some awful way messages which he must intercept. Everything is a cipher and of everything he is the theme.”
—Vladimir Nabokov (1899–1977)