They have to confront with the
imperfect markets contributed by dispersed and low population density, high transportation costs, seasonal rainfall causing seasonal demand for agricultural labor, and simple technologies without significant economies of scale.
The industry got policy protection which encouraged distortions and
imperfect market structure.
Yet, even with the existing
imperfect market, we have booze cruisers and truculent truckers showing their sensitivity to cross- Channel competition fuelled with lower-tax diesel, applying pressure to smooth out tax differences.
The plight of West African cotton producers is a prime example of an
imperfect market. A recent government study 'Making globalisation a force for good', compiled by the UK Department of Trade and Industry and released last July, shows that cotton represents 5%-10% of GDP in Benin, Burkina Faso, Chad, Mali and Togo.
Pennington's celebration and defense of the
imperfect market is valid but misses the mark.
'Fixation of minimum/support price of sugarcane is not meant to replace the market-based prices but to provide a floor to the market and correct the short coming of the
imperfect market often characterized by collusion among the mills.'
Unfortunately, the converse of this axiom was also true, and the massive losses this sector suffered in the late 1980s and early 1990s proved that
imperfect market information could lead to disaster.
Healthcare is known as an
imperfect market because consumers do not pay the actual full price of medical care.
Earlier studies by UNCTAD have hinted that in an
imperfect market dominated by a few large buyers, the possibility of collusion and price fixation in the auction cannot be ruled out More recently, the view is gaining ground that the auction system provides little incentive for value addition by producers, which has long-term implications on their profitability.
At a February 15 hearing before the House Subcommittee on Energy and Air Quality, the American Public Power Association (APPA) called on Congress and FERC to "address the
imperfect market structure."
The market for health-care services is considered an
imperfect market because--1) Health care is a heterogeneous product, as the patient can experience a range of outcomes; 2) Patients who are insured have third-party payers covering their direct medical expenses; and 3) A "market price" is lacking, i.e., no feedback mechanism exists that reflects the value of the resources used in health care.
Armed with Charles Gifford's (a student of Austin Robinson) marginal revenue curve, Joan Robinson and Richard Kahn set about developing the box of tools that became the basis for standard neoclassical
imperfect market theory for generations to come.
