Before 1933, the price analysis was studied under two market
Perfect Competition and (2)
In perfect competition model, it was assumed that there were
large number of firms producing homogeneous product. In the case
of monopoly, there was only one seller of a product. Both these
models were thus polar extremes and were considered satisfactory
for the market price analysis in economic theory.
In the year 1933, Mrs. Joan Robinson of Cambridge University
in England and Edward Chamberlin of Harvard University in
America introduced a third market model. It was called
Imperfect Competition by Mrs. J. Robinson and
Monopolistic Competition by Chamberlin.
The third market model called monopolistic
competition or imperfect competition contains larger
elements of competitive model and a fewer elements of monopoly
model. It is thus a hybrid of monopoly and competition.