Question

Differentiate competitive price from monopoly price.

Answer 1

Sr. No.	Basis	Competitive price	Monopoly price
1.	Market Structure	Exists in a perfectly competitive market with many buyers and sellers.	Exists in a monopoly where a single firm controls the entire market.
2.	Price Determination	Determined by the forces of supply and demand; firms are price takers.	Determined by the monopolist based on profit maximization, where marginal revenue equals marginal cost (MR = MC).
3.	Price Control	No control over price; firms accept the market price.	Full control over price, acting as a price maker.
4.	Output Level	Higher output as firms produce at the point where price equals marginal cost (P = MC).	Lower output as the monopolist restricts supply to maximize profit (MR = MC, but P > MC).