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A major difference between monopoly and monopolistic competition is

A major difference between monopoly and monopolistic competition is

  • One type of firm has market power, and the other does not.

  • The number of firms in the market.

  • One maximizes profits by setting MR equal to MC, and the other does not.

  • One has a downward-sloping demand curve, and the other does not.


Micro-Economics   
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Monopoly ;

Monopoly  is  a market structure where only one firm exists which sells the unique product to large number of buyers.Both firm and industry are same same in the context of Monopoly.so, we can clearly say that there are no substitute products.A monopoly firm has a downward sloping demand curve.profit maximization is done at the equating point i.e, marginal revenue = marginal cost

Monopolistic market:

Monopolistic is a market structure where many sellers are available  who sells differentiated products to large number of buyers.Monopolistic market consists of many substitutes products.A monopolistic firm has a downward sloping demand curve like a monopoly firm.In case of monopolistic firm,by equating marginal revenue with marginal cost firm can maximize its profits.

A major difference between monopoly and monopolistic competetion is THE NUMBER OF FIRMS IN THE MARKET.

THE FIRST OPTION IS ALSO A DIFFERENCE BETWEEN THEM BUT SOME MONOPOLISTIC FIRMS EXERCISE THEIR POWER IN THE MARKET.


answered by: Shaik sultan
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