Imperfect Competition

noun (uncountable), noun phrase

/ɪmˈpɜːfɪkt ˌkɒmpɪˈtɪʃn/

A market structure that falls between the extremes of perfect competition and pure monopoly, encompassing monopolistic competition and oligopoly, in which firms possess some degree of market (price-setting) power due to product differentiation, barriers to entry, or small numbers of sellers. Introduced as a formal concept by Joan Robinson (The Economics of Imperfect Competition, 1933) and Edward Chamberlin (The Theory of Monopolistic Competition, 1933). Indian retail markets, pharmaceuticals, cement, and telecom exhibit varying degrees of imperfect competition, making market structure a recurring concern for the Competition Commission of India (CCI).

✍️ Usage in a UPSC answer

The Competition Commission of India's 2023 investigation into market dominance in the quick-commerce sector exemplifies how imperfect competition — characterised by deep-pocketed incumbents engaging in predatory pricing — can undermine the entry of smaller rivals.

Synonyms

monopolistic competitionoligopolyprice-maker marketnon-competitive marketmarket power environment

Antonyms

perfect competitioncompetitive equilibriumprice-taker marketatomistic competition

🌱 Word Family

imperfect (adjective), competition (noun), monopolistic competition (noun phrase), oligopoly (noun), price-maker (noun phrase)

🔡 Root

Latin im- = not + perfectus = completed, from perficere = to complete; competere = to strive together

📜 Etymology

Latin perfectus (completed, whole) combines per- (thoroughly) and facere (to make); negated by im-. Competition from Latin competere (to strive together). The formal term 'imperfect competition' was independently coined by Joan Robinson and E.H. Chamberlin in 1933 to describe the vast spectrum of real-world markets that classical economics had inadequately modelled.

🧠 Memory Hook

IMPERFECT = NOT PERFECT. Perfect competition has zero power for any one seller. Imperfect competition is the REAL WORLD — firms have SOME power, SOME product difference, like branded goods on a supermarket shelf: not monopoly, not free market perfection.

💰 Indian Economy 📖 Seen in: Indian Economy — Growth, Planning & De...

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