Perfect Competition vs Monopolistic Competition – Difference
Difference Between Perfect Competition and Monopolistic Competition
Differences between Perfect Competition and Monopolistic Competition are explained in the below table,
| Features | Perfect Competition | Monopolistic Competition |
|---|---|---|
| Product Features (Across Producers) | Identical Non-Differentiated | Highly Similar Highly Substitutable But Not Identical |
| Industry Entry & Exit Barriers | Very Easy Industry Entry & Exit | Easy Industry Entry & Exit |
| Industry Competition | High | High |
| Number Of Producers (Sellers) | Large No Of Producers | Large No Of Producers |
| Market Power Of Individual Firm (Ability To Control The Price) | None | Has Low Control Over Price |
| Ability To Control The Output | None | Has Low Control Over Output |
| Possibility To Earn Super Normal Profits | No Possibility | Low Possibility |
| Individual Producer’s Market Share | Very Low | Low |
| Producer’s Possibility To Reach Economies of Scale | Very Low | Low |
Differences between Perfect Competition and Monopolistic Competition are explained in the below points,
- Product Features of Perfect Competition is Identical (Non-Differentiated). But in Monopolistic Competition Product Features are Highly Similar, Highly Substitutable, But Not Identical.
- Industry Entry & Exit Barriers are Low in both Perfect Competition and Monopolistic Competition. But comparatively, it is Higher in Monopolistic Competition.
- There is no ability to control the output in Perfect Competition. But it is Low in Monopolistic Competition.
- There is no possibility of Earn Super Normal Profits in Perfect Competition. But it is Low in Monopolistic Competition.
- Individual Producer’s Market Share is low in Both Perfect Competition and Monopolistic Competition. But Comparatively, it is Lower in Perfect Competition.
- There is no Market Power of an Individual Firm (Ability To Control The Price) in Perfect Competition. But it is Low in Monopolistic Competition.
- Industry Competition of both Perfect Competition and Monopolistic Competition is High.
- There are a Large Number of Producers (Sellers) in Both Perfect Competition and Monopolistic Competition.
- There is a Low Individual Producer’s Possibility to Reach Economies of Scale in Both Perfect Competition and Monopolistic Competition. But Comparatively, it is Lower in Perfect Competition.
Read More:
Market Structures
Perfect Competition
- Overview, Definition, & Features of Perfect Competition
- Main Characteristics / Causes of Perfect Competition
- Real Examples of Perfect Competition (in USA, Canada, Australia, World)
- Advantages and Disadvantages of Perfect Competition
Monopolistic Competition
- Overview, Definition, & Features of Monopolistic Competition
- Main Characteristics / Causes of Monopolistic Competition
- Real Examples of Monopolistic Competition (in USA, Canada, World)
- Advantages and Disadvantages of Monopolistic Competition
Oligopoly Market
- Overview, Definition, Types & Features of Oligopoly Market
- Real Examples of Oligopoly Market (in the USA, Canada, World)
- Seven Important Characteristics of Oligopoly Market
- Advantages and Disadvantages of Oligopoly Market
Monopoly Market
