Question

In: Economics

Describe the characteristics of a perfectly competitive market and a monopolistically competitive market? How are they...

  1. Describe the characteristics of a perfectly competitive market and a monopolistically competitive market? How are they similar? How are they different?

Solutions

Expert Solution

Perfect competition is a market structure type in which

There is large number of sellers and buyers in the market

Price is only decided by the market forces that is demand and supply

There are no barriers to entry and exit

Long term economic profit is zero

Products are identical in nature

If we talk about a monopolistic competitive market then

It has large number of buyers and sellers in the market

Long term economic profit is zero

There are no barriers to entry and exit

Products are homogeneous differentiated in nature

So they are similar in terms of no barriers to entry and exit in the market, there are large number of buyers and sellers in the market and long term economic profitis zero in both the cases

But you will talk about the difference between them then perfect competition has identical products but in case of monopolistic market the products are differentiated in nature in terms of shape, size, colour etc

Rahul Sunny answered 2 years ago
Next > < Previous

Related Solutions

Explain the difference between a monopolistically competitive market and a perfectly competitive market in terms of...
Explain the difference between a monopolistically competitive market and a perfectly competitive market in terms of the immediate consequence of entry by new firms.     
a) State the differences between the monopolistically competitive market and perfectly competitive market. Which market is...
a) State the differences between the monopolistically competitive market and perfectly competitive market. Which market is better for consumers? Explain your answer with 5 examples from Bangladesh. b) State the nature of current market structure in Bangladesh. Discuss the problems and prospects of market structure in Bangladesh with special reference from WASA, PDB, Agricultural products, commercial banks, and Ready-made garments (RMG).
What are the characteristics of a perfectly competitive market?
What are the characteristics of a perfectly competitive market?
What is the main characteristic of a monopolistically competitive market different from a perfectly competitive market?...
What is the main characteristic of a monopolistically competitive market different from a perfectly competitive market? Discuss the important implications of this difference for a monopolistically competitive firm’s demand (i.e., in regards to its price elasticity or price-cost margin, and the number of consumers), and for its short-run and long-run profits.
What is the main characteristic of a monopolistically competitive market different from a perfectly competitive market?...
What is the main characteristic of a monopolistically competitive market different from a perfectly competitive market? Discuss the important implications of this difference for a monopolistically competitive firm’s demand (i.e., in regards to its price elasticity or price-cost margin, and the number of consumers), and for its short-run and long-run profits.?
What is the main characteristic of a monopolistically competitive market different from a perfectly competitive market?...
What is the main characteristic of a monopolistically competitive market different from a perfectly competitive market? Discuss the important implications of this difference for a monopolistically competitive firm’s demand (i.e., in regards to its price elasticity or price-cost margin, and the number of consumers), and for its short-run and long-run profits.
Explain how the characteristics of a monopolistically competitive market determine the shape of an individual firm’s...
Explain how the characteristics of a monopolistically competitive market determine the shape of an individual firm’s demand curve.
“A perfectly competitive market provides a superior outcome relative to a monopolistically competitive market” Discuss NOTE:...
“A perfectly competitive market provides a superior outcome relative to a monopolistically competitive market” Discuss NOTE: YOUR ANSWERS IN THIS SECTION WILL BE SUBJECTED TO A PLAGIARISM CHECK AND ANY ANSWER WITH MORE THAN 20% SIMILARITY INDEX WILL BE AWARDED ZERO POINTS. YOUR ANSWER TO EACH QUESTION SHOULD NOT BE MORE THAN ONE PAGE.
Consider the monopolistically competitive market structure, which has some features of a perfectly competitive market and...
Consider the monopolistically competitive market structure, which has some features of a perfectly competitive market and some features of a monopoly. Complete the following table by indicating whether each attribute characterizes a perfectly competitive market, a monopolistically competitive market, both, or neither. Check all that apply. Attributes Perfectly Competitive Market Monopolistically Competitive Market Many sellers Easy entry Few sellers Price equals average total cost in the long run
For each of the following characteristics, indicate whether it describes a perfectly competitive firm, a monopolistically...
For each of the following characteristics, indicate whether it describes a perfectly competitive firm, a monopolistically competitive firm, both, or neither. (Note: If the characteristic describes neither, leave the entire row unchecked.) Check all that apply. Characteristic Perfectly Competitive Monopolistically Competitive Sells a product identical to that of its competitors     Can earn economic profit in the short run     Produces above the minimum of average total cost in the long run     Charges a price that...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT