Question

Discuss the basic differences between a competitive and a monopoly market. Which market has higher elastic demand in the long run and why?

Answer 1

Difference between monopoly marcket and competitive market - A monopoly marcket and A competitive marcket are two marcket structures that have many key distinction,

Such as marcket share, price control , and barriers to entry .

In a monopoly marcket ,there is only one firm that dedicates the price and supply of goods and services and has total marcket control .

In a competitive marcket is composed of many forms where no one firm has market control.

In a monopoly marcket firms are price maker and in this type of marcket ,price are generally high for goods and services because firms have total marcket control . Since barriers to entry in monopolistic marcket are high.

A monopoly marcket generally involves a single seller and buyer , consumers do not have choice of where to purchase their goods or services

In a competitive marcket prices are dictated by supply and demand ,in a competitive market firms are all price takers because no one firm has enough market control.

In a competitive market have small marcket share , . Barriers to entry are relatively low and allow firms to enter and exit easily.

In a competitive marcket has many buyers and sellers and consumers are able to choose where they buy their goods and services.

Absolutely ,competitive market has more elastic than monopoly marcket ,because all goods in a competitive marcket are considerable perfect substitute and the demand curve is perfectly elastic for each of the small, individual firms that firms are price taker but in a monopoly marcket the demand curve for an individual firm is downward slopping...