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)
“I believe it has been said that one copy of The Times contains more useful information than the whole of the historical works of Thucydides.”
—Richard Cobden (1804–1865)