Three conditions characterize a monopolistic & Perfectly competitive market. First, the market has many firms, none of which is large. Second, there is free entry and exit into the market; there are no barriers to entry or exit. Third, each firm in the market produces a differentiated product. This last condition is what distinguishes monopolistic competition from perfect competition. In perfect competition in addition to the prior two characteristics the firms produces similar products.
Monopolistic Competition
they maximize profit
Monopolistic competition is inefficient compared to perfect competition because firms in monopolistic competition have some degree of market power, allowing them to set prices higher than in perfect competition. This leads to higher prices for consumers and less efficient allocation of resources. Additionally, firms in monopolistic competition may engage in non-price competition, such as advertising, which can further reduce efficiency.
monopoly,perfect competition,monopolistic competition,
Product differentiation
Monopolistic Competition
they maximize profit
Perfect Competition, Monopoly, Monopolistic Competition or Oligopoly
Monopolistic competition is inefficient compared to perfect competition because firms in monopolistic competition have some degree of market power, allowing them to set prices higher than in perfect competition. This leads to higher prices for consumers and less efficient allocation of resources. Additionally, firms in monopolistic competition may engage in non-price competition, such as advertising, which can further reduce efficiency.
In monopolistic competition, sellers can profit from the differences between their products and other products.
monopoly,perfect competition,monopolistic competition,
Product differentiation
higher than in perfect competition
higher than in perfect competition
Monopolistic competition is a common market structure where many competing producers sell products that are differentiated from one anotherperfect competition occurs in markets in which no participant has market power
pure or perfect, monopolistic, oligopoly, and monopoly
The four degrees of competition that exist in a capitalistic economy are: perfect competition, monopolistic competition, oligopoly, and monopoly.