Difference Between Monopoly And Perfect Competition
The main dissimilarities or difference between monopoly and perfect competition can be pointed out as follows:
1. Meaning
Monopoly: Market with single producer or seller with limited range of products and services.
Perfect Competition: Market with large number of producers and sellers with varieties of products and services.
2. Type Of Product
Monopoly: Unique products with no close substitutes.
Perfect Competition: Homogeneous products with various substitutes.
3. Firms/Buyers
Monopoly: Only one firm or trader with large number of buyers.
Perfect Competition: Large numbers of firms and buyers
4. Entry Barrier
Monopoly: Natural and legal barriers to enter in the market.
Perfect Competition: No barrier to enter and exit the market.
5. Profit
Monopoly: Higher profit than perfect competition because of no competition.
Perfect Competition: Firms earn normal profit because of competition.
6. Utilization Of Capacity
Monopoly: Production and operating capacity may be utilized optimally, over utilized or under utilized.
Perfect Competition: Production and operating capacity is always utilized optimally.
Also Read:
Also Read:
7. Price Level
Monopoly: Higher than perfect competition.
Perfect Competition: Normal price rate
8. Demand
Monopoly: Inelastic
Perfect Competition: Perfectly elastic.
Monopoly Vs Perfect Competition (Comparison Chart)
I hope this post is helpful to understand the difference between monopoly and perfect competition and to make comparison between them.
Monopoly Vs Perfect Competition (Comparison Chart)
Basis For Difference
|
Monopoly
|
Perfect Competition
|
Introduction
|
Market with sole seller and limited products
|
Market structure with numerous and wide varieties of products
|
Type Of Products
|
Unique
|
Homogeneous
|
Firms And Buyers
|
Single firm and large number of buyers
|
Large number of firms and buyers
|
Entry Barriers
|
Yes
|
No
|
Profit
|
Higher
|
Normal
|
Production Capacity
|
Optimally utilized, over utilized or under utilized
|
Optimally utilized
|
Price Of The Product
|
Higher
|
Normal
|
Demand
|
Inelastic
|
Perfectly elastic
|
I hope this post is helpful to understand the difference between monopoly and perfect competition and to make comparison between them.
