Abstract
Imperfect competitors are individuals or firms who face downward-sloping demand curves or upward-sloping supply curves for some product(s). This is to be contrasted with perfect competitors who, by definition, face perfectly elastic demand and supply curves for all products. Notice we define perfect competitors not just as price-takers, but as rational price-takers: perfect competitors cannot influence the levels of market clearing prices. By contrast imperfect competitors, by their presence, can influence some equilibrium prices. As simple as these definitions sound, they hold within themselves a world of meaning that we will explore a little in this entry.
This chapter was originally published in The New Palgrave: A Dictionary of Economics, 1st edition, 1987. Edited by John Eatwell, Murray Milgate and Peter Newman
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Makowski, L. (1987). Imperfect Competition. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95121-5_944-1
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DOI: https://doi.org/10.1057/978-1-349-95121-5_944-1
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