Question

Difference between perfect monopoly and monopolistic market

Answer 1

No competition exist in a monopoly market while stiff competition due to non-price competition exists betweenfirms the monopolistically competitivemarket. ... Unlike, monopolisticcompetition, the difference betweenfirm and industry exists, i.e. a firm is a single entity, and a group of firms iscalled industry.

Answer 2

Answer:A monopoly market is characterized by a single producer and seller of a product with no substitutes. This indicates that the monopolist faces a downward sloping demand curve and can choose the price at which its product sells. There are high barriers to entry for a new firm in a monopoly. Monopoly firms’ source of power comes from elements such as copyrights or patents. Control over a resource needed specifically to make the product could be another source of power for a monopoly firm. More often than not, monopoly power is supported by the government. Monopolists are price searchers as in they have imperfect information regarding market demand. They must experiment with different prices to find the one that maximizes profit.

Explanation: