What characterizes imperfect competition in a marketplace?

Imperfect competition in a marketplace is characterized by the presence of products and services that have different features. This differentiation allows sellers to create unique value propositions and attract customers based on distinct attributes such as quality, design, branding, or additional services. In imperfect competition, firms possess some degree of market power, meaning they can influence prices to an extent rather than being mere price takers, which is typical in perfect competition.

The presence of differentiated products can lead to competition based not only on price but also on various elements of the product offering. As a result, consumers are often willing to pay different prices for products that they perceive to be better suited to their needs or preferences, further reinforcing the characteristics of an imperfectly competitive market.

In contrast, markets where all sellers offer identical products are indicative of perfect competition, and a market dominated by a single supplier represents a monopoly rather than imperfect competition. Lastly, uniform pricing across the market is a feature associated with perfect competition where sellers are unable to set different prices; it does not apply to imperfect competition where prices can vary based on product differentiation.