Difference Between Perfect Competition vs. Monopoly
Difference Between Perfect Competition and Monopoly
Differences between Perfect Competition and Monopoly are explained in the below table,
|Industry Entry & Exit Barriers||Very Easy Industry Entry & Exit||Very High Barriers. Nearly Impossible To Entry/Exit.|
|Industry Competition||High||No Competition|
|Number Of Producers (Sellers)||Large No Of Producers||Only One Producer|
|Market Power Of Individual Firm|
(Ability To Control The Price)
Has the Complete Control Over Price
|Ability To Control The Output||None||Has the Complete Control Over Output|
|Possibility To Earn Super Normal Profits||No Possibility||High Possibility|
|Individual Producer’s Market Share||Very Low||Complete Market Share|
|Producer’s Possibility To Reach Economies of Scale||Very Low||Very High|
Differences between Perfect Competition and Monopoly are explained in the below points,
- Product Features of Perfect Competition is Identical (Non-Differentiated). But in a Monopoly Product Features are Unique (No Substitutes).
- Industry Entry & Exit Barriers are Low in Perfect Competition. But comparatively, there are Very High Barriers To Entry in Monopoly (Nearly Impossible To Entry/Exit).
- Industry Competition is high in Perfect Competition. But in Monopoly, there is No Competition.
- There are a Large Number of Producers (Sellers) in Perfect Competition. But comparatively, there is Only One Producer in Monopoly.
- There is no Market Power of an Individual Firm (Ability To Control The Price) in Perfect Competition. But comparatively, it is Very High in Monopoly. Individual firms in Monopoly have Complete Control Over Price.
- There is no possibility of Earn Super Normal Profits in Perfect Competition. But there is a High Possible in Monopoly.
- There is no ability to control the output in Perfect Competition. But Firm Has the Complete Control Over Output in Monopoly.
- Individual Producer’s Market Share is low in Perfect Competition. But Comparatively, there is complete control of market share for one producer in Monopoly.
- There is a Very Low Individual Producer’s Possibility to Reach Economies of Scale in Perfect Competition But it is Very High in Monopoly.
- 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
- Definition, Examples, and Characteristics of Monopoly Market
- Real Examples of Monopoly Market (in the USA, Canada, Australia, World)
- Important Characteristics / Causes of Monopoly Market
- Advantages and Disadvantages of Monopoly 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