In monopolistic competition, firms capture monopoly profits through specialisation of their product, making it non-substitutable with competing firms' products. In oligopolistic competition, this does not occur. Instead, three are three general outcomes: 1) firms collude to mimic a monopoly and share monopoly profits; 2) a dominant firm leads the market and sets the price; 3) firms compete freely and but take each other's decisions into account.
Firms in monopolistic competition sell similar, but not identical products.
Product differentiation
monoplistic competition involves slightly differentiated products while monoply involves a single product.
monoplistic competition involves slightly differentiated products while monoply involves a single product.
While monopolistic competition features many small firms competing against each other, oligopoly features competition amongst a few large firms. Both structures represent imperfect market competition.
A. Pure competition D. Monopolistic competition E. Oligopoly
In monopolistic competition, sellers can profit from the differences between their products and other products.
Product differentiation
monoplistic competition involves slightly differentiated products while monoply involves a single product.
monoplistic competition involves slightly differentiated products while monoply involves a single product.
While monopolistic competition features many small firms competing against each other, oligopoly features competition amongst a few large firms. Both structures represent imperfect market competition.
A. Pure competition D. Monopolistic competition E. Oligopoly
A. Pure competition D. Monopolistic competition E. Oligopoly
A. Pure competition D. Monopolistic competition E. Oligopoly
Monopoly means that there are no competitor for your product or servises
Under pure competition there are large number of buyers and sellers, homogeneous products and free entry and exit. Whereas under Monopoly there is a single seller, there are no close substitutes for the commodity it produces and there are barriers to entry.
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.
the difference between perfect and imperfect oligopoly