Solution:

Imperfect competition:

• The market structure may be imperfect because the number of firms in the industry maybe relatively small, and the commodity or service may not be homogeneous.

• A small number of firms may compete vigorously with one another. Thus, in real life, it is imperfect for the competitive market that exists.

• It is such a market structure where there are many sellers of the products, but the The product of each seller is different from the product of other sellers.

• In an imperfect competition environment, companies sell different products and services, set their own individual prices, fight for market share, and are often protected by barriers to entry and exit, making it harder for new companies to challenge them.

• At the most basic level of an economy, we have markets. A market is simply a situation where people are engaged in buying and selling goods and services, also called outputs.

• It does not need to be a physical place and money does not need to be exchanged. As long as something is given in exchange for something else, a market exists.

• Within a market, some type of competition exists, making it a competitive market. A competitive market means that there are a large number of buyers and sellers of the same output.

• Competitive markets involve either perfect or imperfect competition. Imperfect competition is the most common type of market structure. By definition, imperfect competition is one that lacks a condition needed for perfect competition.

• Imperfect competitive markets are widespread and can be found in the following types of market structures: monopolies, oligopolies, monopolistic competition, monopsonies, and oligopolies.

• This product differentiation manifests itself in trademark, name of the brand, patent, rights, color composition of goods, chemical composition, packaging, advertising, incentive schemes, or different facilities and services offered to the consumers.

Thus, imperfect competition can be of various types as follows:

(1) Monopolistic Competition.

(2) Oligopoly.

(3) Duopoly.