Introduction
There have been observed instances wherein finance assignment help was sought on the subject matter involving forms of market. The essay writers on the forms of market have stated that there are two forms of market such as perfect and imperfect market. The imperfect form of market is the one wherein information related to the demand, supply, and prices is not disclosed to all the buyers and sellers. The buyer and seller do not match instantly in this type of market. The imperfections in the market are caused due to certain reasons, which are the subject matter of discussion in this paper. Further, this paper also discusses the consequences that will follow the market imperfections.
Causes of Imperfect Market
Experts providing help with finance assignment state that the perfect market is based on various assumptions, which are hypothetical in nature. It is the nature of perfect market assumptions, which leads to imperfections in the market. Following points are worth noting in regard to causes of imperfect market:
• One of the major assumptions of a perfect market is the availability of information to all the market participants. However, in reality, full information is not available to all the buyers and sellers at all the times. The unavailability of information causes imperfections in the market.
• As per finance homework solutions, another major assumption of a perfect market is the availability of a large number of buyers and seller and instant matching of the buyers and seller. However, in reality, instant matching of buyers and sellers is hard to achieve, which causes imperfections in the market.
• The perfect market also takes an assumption that there does not exist any transaction cost and taxes. However, in reality, both the transaction costs as well as the taxes exist, which brings in imperfections in the market.
• The perfect market assumes swift mobility of the factors of production such as labor, material, money etc. However, in reality, this assumption does not hold true because, the factors of production cannot be moved swiftly without any problems. This reality of immovability of the factors of production causes imperfections in the market.
• Further, finance homework help online reveals that the costless entry and exit is also one of the major assumptions taken by the perfect market. However, in reality, the entry and exit of the firms in the market is not free, the firms have to incur substantial costs at the time of entering into the market as well as when the business is shut down.
Consequences of Market Imperfections
Corporate finance homework help reveals that the imperfections in the market lead to manipulations in the prices, which affects the buyers as well as sellers. In the imperfect market the price of products is not freely determined by the demand and supply forces, but other factors also come into play. For example, imagine a market where particular types of goods are sold only one seller i.e. the monopoly market. In the monopoly market, the seller will charge the prices for goods at his will; irrespective of the demand from the buyers because he knows that the buyer does not any option left but to buy the goods from him only. The market imperfection due to monopoly affects the buyers adversely as the buyer has to pay more value for goods than the legitimate requirement.
The paper provides finance assignment help with respect to the market imperfection and its consequences. In this paper, the reasons responsible for market imperfections have been highlighted with the clarity. The primary reasons for market imperfections that have been identified in this paper are; availability of information, matching of buyers and seller, transaction cost, taxes, and immovability of the factors of production. Further, the paper also puts light on the consequences of the market imperfections. One of the major consequences of the market imperfections has been identified as the manipulations in the prices of goods by the sellers.