Question

Distinguish between monopoly and monopolistic competition on the basis of entry of firms.

Answer 1

Sr. No.	Basis	Monopoly	Monopolistic Competition
1.	Entry of new firms	Entry of new firms is blocked due to legal, technical, or financial barriers.	Free entry and exit of firms are allowed in the long run.
2.	Barriers to entry	High: includes patents, government licenses, or huge capital requirements.	Low: firms can easily enter or exit the market with few restrictions.
3.	Market structure	Dominated by a single seller with no competition.	Consists of many sellers offering differentiated products.