The two markets such as perfect completion and the monopolistic competition are having some similarities and...

The two markets such as perfect completion and the monopolistic competition are having some similarities and some differences. Analyze these characters. ( support with example and diagram)

Expert Solution

Perfect competition and monopolistic competition are two different types of markets, but there are many similarities and dissimilarity between them.

Similarities between Perfect Competition and Monopolistic Competition:

There are large number of buyers and sellers in both types of market.
There is freedom of entry and exit to firms in both the markets.
The equilibrium condition in both the markets is same i.e equilibrium is at point where MR=MC.
In both the market situations, firms can earn super-normal profits or incur losses in the short-run. But in the long-run, firms earn only normal profit.

Dissimilarities between Perfect Competition and Monopolistic Competition:

In perfect competition every firm is a price taker( price is determined in the market by the forces of demand and supply) but in monopolistic competition every firms have their own pricing strategy.
All the firms in a perfectly competitive market sells a homogenous product but in a monopolistically competitive market the products are similar but differentiated.
In a perfectly competitive market the demand curve(i.e. AR=MR) is perfectly elastic and is a horizontal straight line. But in a monopolistically competitive market the demand curve is elastic i.e downward sloping and the MR curve lies below it.

The similarities and dissimilarity can be seen from the following graphs -

Rahul Sunny answered 1 year ago

4. Perfect competition vs. monopolistic competition: (a) What is the difference between perfect competition and monopolistic...

4. Perfect competition vs. monopolistic competition: (a) What is the difference between perfect competition and monopolistic competition? (b) Suppose the only long-run adjustment is free entry or exit of firms. What is the difference between the short-run equilibrium conditions faced by a perfectly competitive firm and a monopolistically competitive firm? How about the long-run equilibrium conditions?

1. Select 2 types of competitive markets: perfect competition, monopoly, monopolistic competition, oligopoly.

1. Select 2 types of competitive markets: perfect competition, monopoly, monopolistic competition, oligopoly. 2. Explain selected 2 markets. Provide a table where you will compare characteristics. of each market, for example, how many companies operate in this market, are they selling the identical product, when are they maximizing their profit...etc.. 3. Select 2 companies that are operating in each of these markets (one company per market). It can be global company or Uzbek company or combination of both. Provide...

Write an essay describing the following types of markets: Perfect Competition, Monopolistic Competition, Oligopoly and Monopoly....

Write an essay describing the following types of markets: Perfect Competition, Monopolistic Competition, Oligopoly and Monopoly. Describe each market in terms of the number of producers, how products would be classified (homogoneous, differentiated, etc.), the level of market power, the extent of barriers to entry and the type of profit experienced by firms in each (zero, normal or above normal profit). Give an example of a firm or product market for each type of competition. A short paragraph explaining each...

Perfect competition market, monopolistic competition market, oligopoly and monopoly markets product feature, number of buyers /...

Perfect competition market, monopolistic competition market, oligopoly and monopoly markets product feature, number of buyers / sellers, entry barrier, long Compare in terms of period profit and Herfindahl-Hirschman index.

A characteristic that distinguishes monopolistic competition from perfect competition is:

QUESTION 1A characteristic that distinguishes monopolistic competition from perfect competition is:no long-run economic profits.no barriers to market entry or exit.differentiated products.many buyers and sellers.QUESTION 2A firm in a perfectly competitive industry is maximizing its profits at 400 units. If the marginal revenue and marginal cost are each $35 and the firm's average total cost is $25, this firm's profit is:$0.$10.$4,000.$14,000.QUESTION 3A perfectly competitive firm shuts down in the short run when:economic losses occur.the price is below the average total cost...

characteristics of perfect competition, monopoly, monopolistic competition & oligopoly

There are four types of market structures: perfect competition, monopolistic competition, oligopoly, and monopoly. “Perfect competition...

There are four types of market structures: perfect competition, monopolistic competition, oligopoly, and monopoly. “Perfect competition describes a market structure, where a large number of small firms compete against each other” (Zeder, 2016). With a perfect competition market structure firms maximize profits, firms can enter and exit the market as they please, firms sell identical goods, and there are no consumer preferences. “Monopolistic competition refers to a market structure, where a large number of small firms compete against each other”...

Microeconomics How does monopolistic competition differ from perfect competition? “ As monopolistic competition leads to excess...

Microeconomics How does monopolistic competition differ from perfect competition? “ As monopolistic competition leads to excess capacity, there will be an unambiguous social gain if government regulation reduces the number of firms and eliminates excess capacity.” What is meant by excess capacity? Demonstrate (on a graph) that monopolistic competition leads to excess capacity. Do you agree or disagree with the statement’s policy recommendation? Why? Explain?

are perfect conpetion, monopoly, and monopolistic competition markets mind about efficiency in resource utlization? how are...

are perfect conpetion, monopoly, and monopolistic competition markets mind about efficiency in resource utlization? how are resources emphrd in each of the market structures?

5.) Perfect Competition, Monopoly, and Monopolistic Competition Few industries satisfy the conditions of perfect competition. Nevertheless,...

5.) Perfect Competition, Monopoly, and Monopolistic Competition Few industries satisfy the conditions of perfect competition. Nevertheless, perfect competition is studied because it represents a case in which the market mechanism works well. Therefore, it is a useful model to measure the performance of other market forms. How can perfect competition act as a guide for government regulators?

Question