1. Explain imperfect competition.

Question

Accepted Answer

Imperfect competition refers to market structures where firms have some degree of market power and can influence prices.

Firms in imperfect competition can differentiate their products to some extent.
There are various types of imperfect competition such as monopolistic competition, oligopoly, and monopoly.
In imperfect competition, firms may engage in non-price competition such as advertising or product differentiation.
Prices in imperfectly competitive markets are typically higher than in perfectly competitive markets.
Examples of imperfect competition include the smartphone industry (oligopoly) and the soft drink industry (monopolistic competition).