Compare and Contrast the Differences Between a Competitive Market and an Imperfect

question 101

Essay

Compare and contrast the differences between a competitive market and an imperfect market,and give an example of an imperfect market.

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Definitions:

Market Price

The ongoing rate at which an asset or service is being traded for in a certain marketplace.

Normal Profits

The minimum level of profit needed for a company to remain competitive in the market, often considered as the break-even point.

Pure Competition

A market structure characterized by a large number of small firms, homogeneous products, and ease of entry and exit, leading to price taking behavior.

Production Costs

The total expense incurred in manufacturing a product or providing a service, including materials, labor, and overhead costs.