Question

Give the difference between perfect and imperfect market.

Answer 1

Sr. No.	Characteristics	Perfect competition market	Imperfect competition market
1.	Number of sellers and buyers	In a perfect competition market, there are a large number of sellers and buyers.	In an imperfect competition market, there are also a large number of sellers and buyers.
2.	Price	In a perfect competition market, there is only one uniform price for the product.	In an imperfect competition market, different prices for the product prevail.
3.	Nature of products	In a perfect competition market, all firms sell similar and homogeneous products.	In an imperfect competition market, firms sell differentiated products.
4.	Entry and Exit of other firms	In a perfect competition market, there is free entry and exit of all firms in the industry.	In an imperfect competition market, there is also freedom of entry and exit of firms.
5.	Knowledge of the market	In a perfect competition market, buyers and sellers have perfect knowledge of the market conditions.	In an imperfect competition market, buyers and sellers have imperfect knowledge of the market conditions.