A market where there is restricted contact between different customers, or different suppliers. If different customers either do not know what prices others are paying, or are unable to resell goods and services to them, it is possible to discriminate in the prices charged or level of service offered to different parts of the market. Similarly, if different suppliers are isolated from each other, it is possible to buy at discriminatory prices. The same applies in labour markets: if minority groups are segregated by social or language differences, for example, employers can pay separate groups different wages for similar work; in many countries such practice is illegal under anti-discrimination legislation.
Reference: Oxford Press Dictonary of Economics, 5th edt.
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