Indian Economy and The Imperfect Market

An economic market that does not meet the pure or perfect standards of a comparative market is known as an imperfect market. Almost all real markets are classified as imperfect markets. In today’s Economic Times newspaper, imperfect competition is defined as real-world competition.

When it comes to an imperfect market, individual bios and sellers can easily influence the price as well as production without providing full disclosure of information. Imperfect markets also affect the GDP growth rate of a country. However, with no practically executed perfect market, best should be many rules and regulations to control these so-called or imperfect markets 

Real markets are always influenced by the high barriers to entry and exit and also the prices that are made by makers rather than being affected by the supply and demand of consumers. Real markets can only be theoretically explained and can’t be practically implemented because of many other reasons. 

Types of Imperfect Market

The majorly four types of imperfect markets:

• Monopoly

In this type of imperfect market, there is only one seller who is dominant and the products offered by this market have no substitutes. The prices in these markets can be changed without even notifying the consumers.

• Oligopoly

In this type of market there are many buyers but very few sellers. In an oligopoly, the players can stop the others from entering this market. In this type of imperfect market, only one player takes the lead in determining the price for the goods and services and the others follow it. 

• Monopolistic Competition

Here many sellers offer the same type of products and those products can’t be substituted. There is competition between the businesses and the price-makers but the decisions are taken up by individuals don’t affect the others. 

• Monopsony and Oligopsony

In these imperfect market structures, there are many sellers and very few buyers. In both of these cases, one buyer manipulates the market prices by putting one form against another. 

GDP Growth Rate and Imperfect Market

In India, the GDP growth rate is between 2% to 3%. To measure the economic growth of India, we look at the GDP growth rate. Within perfect markets, the sellers increase their profits and have complete control over the quantity or price. Imperfect markets have many implications on the Indian economy and also have negative results as well if not controlled properly. 

The Results of an Imperfect Market 

• Very little is produced
• The prices are said to be high and are charged for more than what is produced 
• There is a huge loss to the economy of the country 
• The company said there on individual prices and fight for market share
• This makes new companies harder to challenge the already existing ones

Imperfect markets affect the GDP growth of a country and also result in Monopoly over the prices and products. In imperfect markets, there are high barriers to entry and exit and the consumers get incomplete information about the prices of different products. Along with this, there are small sections of buyers and sellers in imperfect markets. 

Perfect markets are almost impossible to be completely achieved but are very useful because they help the companies think through the logic of prices and also take into consideration the GDP growth rate of the country. However, the ideology of perfect competition can be theoretically assumed but can never be dynamically reached. 

Conclusion

Therefore, an imperfect market only results in high competition for market shares and barriers to entry and exit. Along with this, perfect markets are only theoretical and can never exist in the real world. Imperfect markets are characterized into four different market structures. Be sure to check out a few essential websites and online articles to avail more knowledge about this topic.