Question

Can you explain why the market for jackets and coats would be examples of imperfect market structures? Please provide real-life examples in your response. Do you believe the demand for costs aligns with the Law of Demand and Law of Supply? A farmer’s market is a good example of a free market system in which the government does not influence prices, but do you believe in some degree vendors are regulated because they have to possess a license to sell goods to the public? Please explain.

Answer 1

Perfectly competitive market occurs where products are homogenous. While the Jackets and coats market does not exhibit such feature. These products are heterogenous or there are lots of close substitutes. Single price is not possible in such market. hence, it is an example of imperfect market.

Law of demand says that demand and price relationship is inverse, it is obeyed in this market. When there is fall in price of jacket, there will be rise in demand for it.

Law of supply shows the positive relationship between supply and price, there will be rise in supply when there is increase in price level.

In agricultural market, vendors are simply intermediaries, if these vendors are not regulated, they might cause distortions in market by differentiating products. Further, they also might exploit consumers by charging higher prices.