Difference Between Monopoly And Monopolistic Competition
The main dissimilarities or difference between monopoly and monopolistic competition can be described as follows:
1. Introduction
Monopoly: Market situation with only one trader who sells unique products to the buyers
Monopolistic Competition: Market situation where there are more firms or sellers (but less than perfect competition)supplying differentiated products to large number of buyers.
2. Close Substitutes
Monopoly: Not available
Monopolistic Competition: Available
3. Buyers And Sellers
Monopoly: Single seller and many buyers
Monopolistic Competition: More than one seller and large number of buyers
4. Competition
Monopoly: No competition because of single seller and no substitutes
Monopolistic Competition: High competition because of many traders and availability of close substitutes
5. Market Entry
Monopoly: Entry in the market is very tough because of several barriers
Monopolistic Competition: There are few barriers for market entry
6. Profit
Monopoly: Very high
Monopolistic Competition: Normal profit
7. Firm Vs Industry
Monopoly: No difference
Monopolistic Competition: There is a difference between firm and industry
Also Read:
Also Read:
8. Production
Monopoly: Production of single and unique product
Monopolistic Competition: Production of differentiated products
9. Price Discrimination
Monopoly: Trader can charge different price to different customers
Monopolistic Competition: Same price for all buyers
Monopoly Vs Monopolistic Competition (Comparison Chart)
I hope this post is helpful to understand the difference between monopoly and monopolistic competition and to make comparison between them.
Monopoly Vs Monopolistic Competition (Comparison Chart)
Basis Of Difference
|
Monopoly
|
Monopolistic Competition
|
Introduction
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Market situation where only one trader sells unique products
|
Market situation where large numbers of sellers sell differentiated products
|
Close Substitutes
|
No
|
Yes
|
Sellers And Buyers
|
Single sellers more buyers
|
More buyers and sellers
|
Competition
|
No
|
Yes
|
Market Entry
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Tough because of several restrictions
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Easy because of less restrictions
|
Profit
|
Very High
|
Average
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Firms Vs Industry
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No difference
|
There is a difference
|
Production
|
Unique product
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Differentiated product
|
Price Discrimination
|
Yes
|
No
|
I hope this post is helpful to understand the difference between monopoly and monopolistic competition and to make comparison between them.
