asked 128k views
5 votes
Imperfect markets:

a. always result in supply exceeding demand.


b. occur when the buyer or seller has an influence on the price.


c. do not exist in democracies.


d. can't occur if there are many buyers and many sellers.


e. always result in demand exceeding supply.

asked
User MdDroid
by
7.4k points

1 Answer

3 votes

An imperfect market occurs when either the buyer or seller has influence over the price.

The law of supply and demand would state that as price goes up, quantity demanded would go down, but supplies would go up.

If either side can manipulate the price, then the equilibrium is thrown off. Adam Smith would say that the "invisible hand of the market" should naturally control price if the market is left alone.

answered
User Tkone
by
7.7k points
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