0
There are not many similarities between a perfectly competitive market and a monopoly. In a perfectly competitive market there are no barriers to exit and enter the market. If there are excess profits being made in this market other firms will enter the market to try and get a share of those profits. Since there are many markets with a equal piece of the market share each firms production decision will have little or no effect on the market. Because of the firm's relative size to the market it must be a price taker. If the firm tries to increase the price in a perfectly competitive market then no consumers will buy from that firm because there are numerous other firms that sell that the same good. The price maximization condition of the competitive market is marginal cost equals marginal revenue. In a competitive market marginal revenue is the same as demand because the firm can sell as many as it wants in a competitive market. In a monopoly, the firm is the price setter. It is the only firm that is supplying so it has price setting power. The price maximization condition of a monopoly is marginal cost equals marginal revenue but with a caveat. Marginal revenue does not equal the demand curve, but is derived from the demand curve. Since the firm is the only supplier, assuming it cannot practice price discrimination, it must lower its price in order to gain more customers so the people who would pay a high price are paying a lower price because the firm wants to sell its products to more customers.
Wiki User
∙ 15y ago
Wiki User
∙ 12y agoin both market, firms need to advertise their products to make profit by increasing there sales volumes.Advertising plays an important role here.
It is also found that the products are homogeneous to some extent.
Wiki User
∙ 16y agoin a perfect market structure there are a very large number of providers producing a homogeneous product whereas in a monopoly market structure there is only one provider of a product.
Wiki User
∙ 9y agoThere are only a few similarities between the perfect competitive market and monopoly market. Both have many buyers and numerous goods offered.
Wiki User
∙ 9y agoA monopoly has no competition.
Add your answer:
Earn +20 pts
What are the similarities between basketball and ring-ballwhat are the similarities between basketball and ring-ballwhat are the similarities between basketball and ring-ball?
what are the similarities between basketball and ring-ball
Similarities between the ulna and the radius?
what is the similarities between the ulna and the radius
What is the similarities between for and while statement?
similarities
What are the similarities between a switch and a hub?
what are the similarities between network switch and a hub
What is the similarities between imperialists and anti-imperialists?
There are zero similarities between the two.
One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where -?
perfectly competitive industry become a monopoly， what changes
One difference between a perfectly competitive firm and a monopoly is that a perfectly competitive firm produces where?
perfectly competitive industry become a monopoly， what changes
what is the differences between Perfect Competition and Monopoly Market?
The difference between a monopoly market and a perfectly competitive market is that in a perfectly competitive market there are many sellers and buyers, the traded goods are homogeneous goods or the same goods and sellers are not free to set prices. whereas, a monopoly market is a market that has only one seller, so buyers have no other choice and sellers have a large influence on price changes.
What are the similarities between oligopoly and pure monopoly?
They both have to deal with money and buying out.
How are a monopolistic firm and a competitive firm similar?
Monopoly means that there are no competitor for your product or servises
What is the relationship between start up costs and a competitive market?
markets with high start-up costs are less likely to be perfectly competitive.
When a perfectly competitive firm is at its profit maximising level of output it is?
maximizing the difference between total revenue and total cost
What are the similarities between basketball and ring-ballwhat are the similarities between basketball and ring-ballwhat are the similarities between basketball and ring-ball?
what are the similarities between basketball and ring-ball
What are the differences between monopolistically competitive and purely competitive?
Monopoly is complete control i.e. buying all compeitors and suppliers, while plain compeition is an example of darwinism where the strongest survive but the compeition causes the prices to remain relatively low because companies want to sell their goods.
Similarities between the ulna and the radius?
what is the similarities between the ulna and the radius
What is the difference between the term 'monopoly' and 'natural monopoly'?
The difference between the term 'monopoly' and 'natural monopoly' is a monopoly is a market situation one group controls the availability and price of a service or item. A natural monopoly is a service or item that is provided by a single sorce. An example would be transportation like buses, or taxies.
What is the similarities between for and while statement?
similarities
