ABSTRACT
The problem with competitive and monopoly markets is that they cover a very small fraction of overall productive activity. Two other market forms have been developed to fill the void: imperfect competition, also called monopolistic competition, and oligopoly. The same supermarket is an imperfect competitor in a large city, an oligopolist in a small city which has only a few, and a monopolist in a town with only one. The concept of imperfect competition or monopolistic competition was independently propounded by Joan Robinson, The Theory of Imperfect Competition, and Edward H. Chamberlin, The Theory of Monopolistic Competition. The first three attributes of imperfect competition many producers, many buyers, and easy entry and exit are also characteristics of competitive markets. Firms in competitive markets produce a homogeneous product but those in imperfect competition produce differentiated products. The major example of imperfect competition is retail trade.
