Can You Explain The Imperfections Of Market Economy?

Apparently it seems that for the operation of an economic system, price mechanism or market model is plausible. But in real life, perhaps, it is not so, particularly when we see the role of externalities, lack of information, monopolies and misallocation of resources etc. such like events are given the name of market imperfections which obstruct the smooth working of price mechanism.

Before observing such all, we introduce what market imperfections are: if at any time the forces of demand and supply could not play their due role the market becomes imperfect. Thus by marker imperfections we mean those defects which interrupt the smooth functioning of price mechanism. It is reminded that if the market is perfect, the factors will get the payments equal to their marginal product, consumers will maximize their satisfaction, price of a good will remain same throughout the market, the wages of a labor will remain same in the labor market, national income will be distributed fairly, equitably and resources will be allocated optimally. This entire phenomenon coincides with praetor's optimality.

The market imperfections will be analyzed with reference to those defects which rise within the capitalistic system and those defects which are out of the system.