Inefficient Market

In an absolutely efficient market, the price of an item will exactly reflect the true value of an item. If oil cost $65 a barrel to suck out of the ground, package, and ship, then it is definitely worth $65 a barrel. And that's what it'll sell for.

An inefficient market represents the opposite: a market where price doesn’t indicate true value. On the far end of inefficiency, prices would approach near randomness. Think: market bubbles...very inefficient markets. Involving tulips that cost more than a house, or situations where you plan to retire on your collection of first-run, still-in-original-package Star Wars toys.