What is the difference between monopoly and monopolistic competition in the context of diamond market?

Monopoly means a market situation in which there is only a single seller and large no. of buyers. whereas monopolistic competition is a market situation in which there is large no. of sellers and large number of buyers.

In monopolistic competition, close substitutes are there in the sense that products are different in terms of size, color, packaging, brand, price, etc. as in the case of soap, toothpaste, etc.
In monopoly, there is no close substitute of the good, if any, it will be a remote substitute.

In monopolistic competition, there is aggressive advertising but in monopoly, there is no advertising at all or a very little.

In monopolistic competition, demand curve faced by the firm is more elastic because of availability of close substitutes. It means if a firm raises its price, it will lose its large market share as customers in large will shift to close substitutes present in the market. In monopoly, the demand curve faced by the firm is less elastic because of no close substitutes. It means if the firm raises its price, demand will not fall in a large quantity as it is only one in the market.