{"id":4076,"date":"2020-03-24T07:03:37","date_gmt":"2020-03-24T07:03:37","guid":{"rendered":"https:\/\/commerceiets.com\/?p=4076"},"modified":"2020-03-24T07:03:37","modified_gmt":"2020-03-24T07:03:37","slug":"difference-between-perfect-competition-monopoly","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/difference-between-perfect-competition-monopoly\/","title":{"rendered":"DIFFERENCE BETWEEN PERFECT COMPETITION AND MONOPOLY"},"content":{"rendered":"\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_72 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-1'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/difference-between-perfect-competition-monopoly\/#DIFFERENCE_BETWEEN_PERFECT_COMPETITION_MONOPOLY\" title=\"DIFFERENCE BETWEEN PERFECT COMPETITION &amp; MONOPOLY\">DIFFERENCE BETWEEN PERFECT COMPETITION &amp; MONOPOLY<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/difference-between-perfect-competition-monopoly\/#In_this_post_you_will_study_about_difference_between_Perfect_competition_Monopoly\" title=\"In this post you will study about difference between Perfect competition &amp; Monopoly.\">In this post you will study about difference between Perfect competition &amp; Monopoly.<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/difference-between-perfect-competition-monopoly\/#PERFECT_COMPETITION\" title=\"PERFECT\nCOMPETITION\">PERFECT\nCOMPETITION<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/commerceiets.com\/difference-between-perfect-competition-monopoly\/#MONOPOLY\" title=\"MONOPOLY\">MONOPOLY<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/commerceiets.com\/difference-between-perfect-competition-monopoly\/#CONCLUSION\" title=\"CONCLUSION\">CONCLUSION<\/a><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h1 class=\"has-text-align-center wp-block-heading\" id=\"difference-between-perfect-competition-monopoly\"><span class=\"ez-toc-section\" id=\"DIFFERENCE_BETWEEN_PERFECT_COMPETITION_MONOPOLY\"><\/span><strong>DIFFERENCE BETWEEN PERFECT COMPETITION &amp; MONOPOLY<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h1>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"in-this-post-you-will-study-about-difference-between-perfect-competition-monopoly\"><span class=\"ez-toc-section\" id=\"In_this_post_you_will_study_about_difference_between_Perfect_competition_Monopoly\"><\/span>In this post you will study about difference between Perfect competition &amp; Monopoly.<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"perfect-competition\"><span class=\"ez-toc-section\" id=\"PERFECT_COMPETITION\"><\/span><strong>PERFECT\nCOMPETITION<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>A P<a href=\"https:\/\/commerceiets.com\/perfect-competition\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"erfect Competition (opens in a new tab)\">erfect Competition<\/a> market is that type of market in which the number of buyers and sellers is very large, all are engaged in buying and selling a homogeneous product without any artificial restrictions and possessing perfect knowledge of the market at a time.<\/p>\n\n\n\n<p><strong>ACCORDING TO MRS. JOAN ROBINSON<\/strong><\/p>\n\n\n\n<p><strong>\u201c<\/strong><strong>Perfect Competition prevails when the demand for the output of each\nproducer is perfectly elastic.\u201d<\/strong><strong><\/strong><\/p>\n\n\n\n<p><strong>ACCORDING TO BOULDING<\/strong><\/p>\n\n\n\n<p>\u201cA Perfect Competition market may be defined as a large\nnumber of buyers and sellers all engaged in the purchase and sale of\nidentically similar commodities, who are in close contact with one another and\nwho buy and sell freely among themselves.\u201d<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"monopoly\"><span class=\"ez-toc-section\" id=\"MONOPOLY\"><\/span><strong>MONOPOLY<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>The word monopoly has been derived from the combination\nof two words i.e., \u2018Mono\u2019 and \u2018Poly\u2019. Mono refers to a single and poly to\ncontrol.<\/p>\n\n\n\n<p>In this way, <a href=\"https:\/\/commerceiets.com\/monopoly-meaning\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"monopoly (opens in a new tab)\">monopoly<\/a> refers to a market situation in which there is only one seller of a commodity.<\/p>\n\n\n\n<p>There are no close substitutes for the commodity it\nproduces and there are barriers to entry. The single producer may be in the\nform of individual owner or a single partnership or a joint stock company. In\nother words, under monopoly there is no difference between firm and industry.<\/p>\n\n\n\n<p>Monopolist has full control over the supply of commodity. Having control over the supply of the commodity he possesses the market power to set the price. Thus, as a single seller, monopolist may be a king without a crown. If there is to be monopoly, the cross elasticity of demand between the product of the monopolist and the product of any other seller must be very small.<\/p>\n\n\n\n<p>The difference between Perfect Competition &amp; Monopoly is as follows:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>\n  <strong>BASIS OF\n  DIFFERENCE<\/strong>\n  <\/td><td>\n  <strong>PERFECT\n  COMPETITION<\/strong>\n  <\/td><td>\n  <strong>MONOPOLY<\/strong>\n  <\/td><\/tr><tr><td>\n  BUYERS AND\n  SELLERS\n  <\/td><td>\n  Large\n  number of buyers and sellers.\n  <\/td><td>\n  Single\n  seller but large number of buyers.\n  <\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/elasticity-of-demand\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"   DEMAND   ELASTICITY    (opens in a new tab)\">   DEMAND   ELASTICITY   <\/a><\/td><td>\n  Demand is\n  perfectly elastic.\n  <\/td><td>\n  Demand is\n  inelastic.\n  <\/td><\/tr><tr><td>\n  COMPETITION\n  <\/td><td>\n  Competition\n  is there.\n  <\/td><td>\n  No\n  competition is there.\n  <\/td><\/tr><tr><td>\n  OUTPUT AND\n  PRICE\n  <\/td><td>\n  Under perfect competition price is equal to marginal\n  cost at the equilibrium output.\n  <\/td><td>\n  While under monopoly, the price is greater than average\n  cost.\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  EQUILIBRIUM\n  <\/td><td>\n  Under perfect competition equilibrium is possible only when mr = mc\n  and mc cuts the mr curve from below.&nbsp;\n  <\/td><td>\n  But under simple monopoly, equilibrium can be realized whether\n  marginal cost is rising, constant or falling.\n  <\/td><\/tr><tr><td>\n  ENTRY AND\n  EXIT OF FIRMS\n  <\/td><td>\n  Under perfect competition, there exist no restrictions on the entry or\n  exit of firms into the industry.&nbsp;\n  <\/td><td>\n  Under simple monopoly, there are strong barriers on the entry and exit\n  of firms.\n  <\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/price-discrimination\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"   PRICE   DISCRIMINATION    (opens in a new tab)\">   PRICE   DISCRIMINATION   <\/a><\/td><td>\n  Under simple monopoly, a monopolist can charge different prices from\n  the different groups of buyers.&nbsp;\n  <\/td><td>\n  But, in the perfectly competitive market, it is absent by definition.\n  <\/td><\/tr><tr><td>\n  PROFITS\n  <\/td><td>\n  Under perfect competition, a firm in the long run enjoys only normal\n  profits.\n  <\/td><td>\n  The difference between price and marginal cost under monopoly results\n  in super-normal profits to the monopolist.&nbsp;\n  <\/td><\/tr><tr><td>\n  SUPPLY\n  CURVE OF THE FIRM\n  <\/td><td>\n  Under perfect competition, supply curve can be known. It is so because\n  all firms can sell desired quantity at the prevailing price. Moreover, there\n  is no price discrimination.&nbsp;\n  <\/td><td>\n  Under monopoly, supply curve cannot be known. Mc curve is not the supply\n  curve of the monopolist.\n  <\/td><\/tr><tr><td>   SLOPE OF   <a href=\"https:\/\/commerceiets.com\/demand\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"DEMAND (opens in a new tab)\">DEMAND<\/a> CURVE   <\/td><td>\n  Under perfect competition, demand curve is perfectly elastic. It is\n  due to the existence of large number of firms. Price of the product is\n  determined by the industry and each firm has to accept that price.&nbsp;\n  <\/td><td>\n  On the other hand, under monopoly, average revenue curve slopes\n  downward. Ar and mr curves are separate from each other. Price is determined\n  by the monopolist.&nbsp;\n  <\/td><\/tr><\/tbody><\/table><figcaption><strong>DIFFERENCE BETWEEN PERFECT COMPETITION &amp; MONOPOLY<\/strong><\/figcaption><\/figure>\n\n\n\n<h2 class=\"has-text-align-center wp-block-heading\" id=\"conclusion\"><span class=\"ez-toc-section\" id=\"CONCLUSION\"><\/span><strong>CONCLUSION<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>In a monopoly market, it is possible for a firm to charge distinct prices from various customers, for the same product. So, the firm can adopt price discrimination policy. On the other hand, as non-price competition is prevalent in the market, therefore, price discrimination is not possible, so, no firm can charge different prices from different customers.<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><td><strong>Also Study<\/strong><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/demand\/\">Theory of Demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-demand\/\">Law of Demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/demand-function\/\">Demand Function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/exceptions-of-law-of-demand\/\">Exceptions of law of demand<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/elasticity-of-demand\/\">Elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/change-in-demand\/\">Change in demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/price-elasticity-of-demand\/\">Price elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-law-of-demand-and-elasticity-of-demand\/\">Law of demand Vs Elasticity of demand<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/factors-affecting-price-elasticity-of-demand\/\">Factors affecting price elasticity of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/production-function\/\">Production function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-short-run-long-run-production-function\/\">Short run vs long run production function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-variable-proportions\/\">Law of variable proportions<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/types-of-demand\/\">Types of demand<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/managerial-economics\/\">Managerial economics<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/characteristics-of-managerial-economics\/\">Characteristics of managerial economics<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/scope-of-managerial-economics\/\">Scope of managerial economics<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/utility-analysis\/\">Utility analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-diminishing-marginal-utility\/\">Law of diminishing marginal utility<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-equi-marginal-utility\/\">Law of equi marginal utility<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/consumer-equilibrium\/\">Consumers Equilibrium<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/indifference-curve-analysis\/\">Indifference curve analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/consumer-equilibrium-using-indifference-curve-analysis\/\">Consumer equilibrium using indifference curve analysis<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/relationship-between-tp-ap-and-mp\/\">Relationship between TP, AP and MP<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-increasing-returns\/\">Law of increasing returns<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/law-of-diminishing-returns\/\">Law of diminishing returns<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/law-of-constant-returns\/\">Law of constant returns<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/returns-to-scale\/\">Returns to Scale<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/economies-and-diseconomies-of-scale\/\">Economies and diseconomies of scale<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/concept-of-costs\/\">Concept of costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/relationship-between-ac-and-mc\/\">Relationship between AC and MC<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/traditional-theory-of-cost\/\">Traditional theory of costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/modern-theory-of-cost\/\">Modern theory of costs<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/explicit-vs-implicit-costs\/\">Explicit vs Implicit costs<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/revenue\/\">Revenue<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perfect-competition\/\">Perfect competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopoly-meaning\/\">Monopoly<\/a>&nbsp;<\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/price-discrimination\/\">Price discrimination<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/difference-between-perfect-competition-and-monopoly\/\">Difference between perfect competition and monopoly<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/perfect-and-monopolistic-competition\/\">Perfect Vs Monopolistic competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopoly-and-monopolistic-competition\/\">Monopoly and monopolistic competition<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/product-differentiation-strategy\/\">Product differentiation strategy<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/monopolistic-competition\/\">Monopolistic competition<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/national-income-in-india\/\">National Income in India<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/measurement-of-national-income\/\">Measurement of national income in India<\/a><\/td><\/tr><tr><td><a href=\"https:\/\/commerceiets.com\/consumption-function\/\">Consumption function<\/a><\/td><td><a href=\"https:\/\/commerceiets.com\/keynesian-psychological-law-of-consumption\/\">Keynes Psychological law of consumption<\/a><\/td><td><\/td><td><\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link\" href=\"https:\/\/www.linkedin.com\/in\/kajal-mahajan-7549b2197\/\" target=\"_blank\" rel=\"noreferrer noopener\">CONNECT ON LINKEDIN<\/a><\/div>\n<\/div>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"266\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1024x266.jpg\" alt=\"DIFFERENCE BETWEEN PERFECT COMPETITION &amp; MONOPOLY\" class=\"wp-image-787\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1024x266.jpg 1024w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-300x78.jpg 300w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-768x199.jpg 768w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize-1536x398.jpg 1536w, https:\/\/commerceiets.com\/wp-content\/uploads\/2019\/04\/cropped-Presentation-resize.jpg 1920w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption>DIFFERENCE BETWEEN PERFECT COMPETITION &amp; MONOPOLY<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>DIFFERENCE BETWEEN PERFECT COMPETITION &amp; MONOPOLY In this post you will study about difference between Perfect competition &amp; Monopoly. PERFECT COMPETITION A Perfect Competition market is that type of market in which the number of buyers and sellers is very large, all are engaged in buying and selling a homogeneous product without any artificial restrictions&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/difference-between-perfect-competition-monopoly\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;DIFFERENCE BETWEEN PERFECT COMPETITION AND MONOPOLY&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":4077,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56,113,92],"tags":[],"class_list":["post-4076","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-difference-between","category-managerial-economics","category-micro-economics"],"_links":{"self":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/4076","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/comments?post=4076"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/4076\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/4077"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=4076"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=4076"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=4076"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}