Question

Distinguish Between Monopoly and Monopolistic competition.

What are the two differences between monopoly and monopolistic competition?

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

Answer 1

Sr. No.	Basis	Monopoly	Monopolistic Competition
1.	No. of sellers	One seller	Fairly large number of sellers
2.	No. of buyers	Large number of buyers	Large number of buyers
3.	Nature of the product	Homogeneous product	Differentiated product
4.	Nature of knowledge	Some knowledge	Some knowledge
5.	Nature of entry and exit	Closed entry or Restricted entry	Free entry and exit
6.	Market power	Large power	Slight power
7.	Average Revenue Curve	Downward sloping; relatively less elastic due to no close substitutes.	Downward sloping; more elastic due to availability of close substitutes.