Question

Discuss and explain at least 250 words Monopoly Vs Perfect Competition and Oligopolies and Monopolistic Competition

Answer 1

Monopolist is a form of imperfect market which ia different from perfect competition, Oligopoly and monopolistic competition.

A monopolist is a single seller of a good thereby making it both a firm and industry in the market. This is in contrast to the high number of sellers under Perfect competition.

This allows monopolist to charge and decide the price level which is even greater than the firms in oligopoly.

A monopolist produces a unique good which gives it more market power unlike the case of Perfect competition.

This market power gives the monopolist the power to charge different prices from different consumers.

Monopoly can earn positive economic profit even in the long run unlike any other market form.

Monopolist produces at a less than efficient level due to which there is deadweight loss in the market and monopolist is able to earn high profit.

Only in the case of monopolist we see such high barriers to entry for new firms that it's almost impossible for any firm to enter the market. These barriers can be natural or induced the government.

The monopolist doesn't need to engage in non price competition like advertising unlike oligopolist.