Question

In detail compare and contrast monopolistic competition and perfect competition.

Thank you.

Answer 1

1.In perfect competition, there isno barrier to entry and exit in the market but in monopolistic competition there are few barrier to entry .

2.In perfect competition ,it is assumed that buyer and seller has perfect knowledge about the market but it is not true in case of monopolistic competition

3.The price is decided by the demand forces that is demand and supply in the market in perfect competition but in monopolistic competition the price is decided by the sellers

4.In perfect competition ,the products are homogeneous in nature but in monopolistic competition the products are slightly differentiated in terms of Shape, size ,colour