© 2009 Pearson Education, Inc. Publishing as Prentice Hall Principles of Economics 9e by Case, Fair and Oster
The Sources of Market Failure
imperfect condition An industry in which single firms have some control over price and competition. Imperfectly competitive industries give rise to an inefficient allocation of resources.
monopoly An industry composed of only one firm that produces a product for which there are no close substitutes and in which significant barriers exist to prevent new firms from entering the industry.