Difference Between Perfect And Monopolistic Competition
The major dissimilarities or difference between perfect competition and monopolistic competition can be pointed out as follows:
1. Introduction
Perfect Competition: A market where large number of producers or sellers sell several homogeneous products and serves to the large number of buyers.
Monopolistic Competition: A market where many sellers (but not more than perfect competition) sell differentiated products and services to large number of buyers.
2. Market Control
Perfect Competition: A market is controlled by supply and demand
Monopolistic Competition: A market is controlled by the firms
3. Selling Price
Perfect Competition: Low and uniform selling price.
Monopolistic Competition: Selling price is high and may not be uniform.
4. Demand
Perfect Competition: Elastic Demand
Monopolistic Competition: Less elastic than perfect competition
Perfect Competition: Always horizontal
Monopolistic Competition: Always downward
6. Type Of Products
Perfect Competition: Homogeneous products and services are offered in the market
Monopolistic Competition: Differentiated products are offered
7. Output Level
Perfect Competition: Larger output
Monopolistic Competition: Smaller output
8. Product Standardization
Perfect Competition: Yes
Monopolistic Competition: No
Also Read:
Also Read:
9. Barriers To Entry
Perfect Competition: Easy to enter and exit the market without any restrictions or barriers
Monopolistic Competition: There are some barriers and restriction in market entry
10. Production Efficiency
Perfect Competition: It promotes production efficiency
Monopolistic Competition: It does not promote production efficiency.
Perfect Competition Vs Monopolistic Competition (Comparison Chart)
I hope this post is helpful to understand the difference between perfect competition and monopolistic competition and to make comparison between them.
Basis For Difference
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Perfect Competition
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Monopolistic Competition
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Introduction
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Market with large numbers of sellers and buyers and deals with homogeneous products and services
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Market with large number of buyers and sellers and deals with differentiated products and services
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Controlled By
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Supply and demand
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Firms
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Selling Price
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Uniform/Low
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High/ Not uniform
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Demand
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Highly elastic
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Less elastic
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Slope Of Demand Curve
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Horizontal
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Downward
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Product Type
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Homogeneous
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Differentiated
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Output Level
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Large
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Small
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Product Standardization
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Yes
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No
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Entry Barriers
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No
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Yes
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Promotion Of Efficiency
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Yes
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I hope this post is helpful to understand the difference between perfect competition and monopolistic competition and to make comparison between them.
