{"id":4208,"date":"2020-03-28T03:57:18","date_gmt":"2020-03-28T03:57:18","guid":{"rendered":"https:\/\/commerceiets.com\/?p=4208"},"modified":"2020-03-28T03:57:18","modified_gmt":"2020-03-28T03:57:18","slug":"perfect-and-monopolistic-competition","status":"publish","type":"post","link":"https:\/\/commerceiets.com\/perfect-and-monopolistic-competition\/","title":{"rendered":"PERFECT AND MONOPOLISTIC COMPETITION"},"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-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/commerceiets.com\/perfect-and-monopolistic-competition\/#DIFFERENCE_BETWEEN_PERFECT_AND_MONOPOLISTIC_COMPETITION\" title=\"DIFFERENCE BETWEEN PERFECT AND MONOPOLISTIC COMPETITION\">DIFFERENCE BETWEEN PERFECT AND MONOPOLISTIC COMPETITION<\/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'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/commerceiets.com\/perfect-and-monopolistic-competition\/#In_this_post_you_will_learn_about_perfect_and_monopolistic_competition_differences\" title=\"In this post you will learn about perfect and monopolistic competition differences.\">In this post you will learn about perfect and monopolistic competition differences.<\/a><\/li><\/ul><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/commerceiets.com\/perfect-and-monopolistic-competition\/#CONCLUSION\" title=\"CONCLUSION\">CONCLUSION<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"has-text-align-center wp-block-heading\" id=\"difference-between-perfect-and-monopolistic-competition\"><span class=\"ez-toc-section\" id=\"DIFFERENCE_BETWEEN_PERFECT_AND_MONOPOLISTIC_COMPETITION\"><\/span><strong>DIFFERENCE BETWEEN PERFECT AND MONOPOLISTIC COMPETITION<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-image size-full\"><img loading=\"lazy\" decoding=\"async\" width=\"686\" height=\"317\" src=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/03\/Perfect-Competition-vs-Monopolistic-Competition.jpg\" alt=\"PERFECT AND MONOPOLISTIC COMPETITION\" class=\"wp-image-4209\" srcset=\"https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/03\/Perfect-Competition-vs-Monopolistic-Competition.jpg 686w, https:\/\/commerceiets.com\/wp-content\/uploads\/2020\/03\/Perfect-Competition-vs-Monopolistic-Competition-300x139.jpg 300w\" sizes=\"auto, (max-width: 686px) 100vw, 686px\" \/><figcaption><strong>PERFECT AND MONOPOLISTIC COMPETITION<\/strong><\/figcaption><\/figure>\n\n\n\n<h4 class=\"wp-block-heading\" id=\"in-this-post-you-will-learn-about-perfect-and-monopolistic-competition-differences\"><span class=\"ez-toc-section\" id=\"In_this_post_you_will_learn_about_perfect_and_monopolistic_competition_differences\"><\/span>In this post you will learn about perfect and monopolistic competition differences.<span class=\"ez-toc-section-end\"><\/span><\/h4>\n\n\n\n<p class=\"has-green-background-color has-background\"><strong>PERFECT COMPETITION<\/strong><\/p>\n\n\n\n<p>A Perfect Competition market is that type of market in\nwhich the number of buyers and sellers is very large, all are engaged in buying\nand selling a homogeneous product without any artificial restrictions and\npossessing perfect knowledge of the market at a time.<\/p>\n\n\n\n<p class=\"has-green-background-color has-background\"><strong>MONOPOLISTIC\nCOMPETITION<\/strong><\/p>\n\n\n\n<p>The concept of monopolistic competition was put-forth by\nan American economist Prof. E.H. Chamberlin in his popular book, \u201cThe Theory of\nMonopolistic Competition\u201d published in 1933.<\/p>\n\n\n\n<p>Monopolistic competition&nbsp;is a type of imperfect competition market structure in which a large number of firms produce differentiated products and there are no barriers to entry.<\/p>\n\n\n\n<p>The difference between <a href=\"https:\/\/commerceiets.com\/perfect-competition\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"perfect (opens in a new tab)\">perfect<\/a> and <a href=\"https:\/\/commerceiets.com\/monopolistic-competition\/\" target=\"_blank\" rel=\"noreferrer noopener\" aria-label=\"monopolistic competition  (opens in a new tab)\">monopolistic competition <\/a>is as follows:<\/p>\n\n\n\n<figure class=\"wp-block-table\"><table><tbody><tr><td>\n  <strong>BASIS FOR COMPARISON<\/strong>\n  <\/td><td>\n  <strong>PERFECT COMPETITION<\/strong>\n  <\/td><td>\n  <strong>MONOPOLISTIC COMPETITION<\/strong>\n  <\/td><\/tr><tr><td>\n  <strong>MEANING<\/strong>\n  <\/td><td>\n  A market structure,\n  where there are many sellers selling similar goods to the buyers, is perfect\n  competition.\n  <\/td><td>\n  Monopolistic\n  Competition is a market structure, where there are numerous sellers, selling\n  close substitute goods to the buyers.\n  <\/td><\/tr><tr><td>\n  <strong>PRODUCT<\/strong>\n  <\/td><td>\n  The product is Standardized\n  and uniform in perfect competition.\n  <\/td><td>\n  The products are Differentiated\n  in monopolistic competition.\n  <\/td><\/tr><tr><td>\n  <strong>PRICE<\/strong>\n  <\/td><td>\n  Determined by demand\n  and supply forces, for the whole industry.\n  <\/td><td>\n  Every firm offer\n  products to customers at its own price.\n  <\/td><\/tr><tr><td>\n  <strong>&nbsp;<\/strong>\n  <strong>SELLING COSTS<\/strong>\n  <\/td><td>\n  There is no selling\n  costs.\n  <\/td><td>\n  The firms have to\n  incur huge expenditure on advertisement to sell their products. So heavy selling\n  costs exists.\n  <\/td><\/tr><tr><td>\n  <strong>ENTRY AND EXIT<\/strong>\n  <\/td><td>\n  There are no barriers\n  to entry and exit of firms.\n  <\/td><td>\n  There exists Few\n  barriers on entry and exit of firms.\n  <\/td><\/tr><tr><td>\n  <strong>DEMAND CURVE SLOPE<\/strong>\n  <\/td><td>\n  The demand curve is Horizontal\n  line.\n  <\/td><td>\n  The demand curve is Downward\n  sloping.\n  <\/td><\/tr><tr><td>\n  <strong>&nbsp;<\/strong>\n  <strong>ELASTICITY OF DEMAND<\/strong>\n  <\/td><td>\n  The demand is\n  perfectly elastic.\n  <\/td><td>\n  The demand is\n  relatively elastic.\n  <\/td><\/tr><tr><td>\n  <strong>RELATION BETWEEN AR AND MR<\/strong>\n  <\/td><td>\n  AR = MR\n  <\/td><td>\n  AR &gt; MR\n  <\/td><\/tr><tr><td>\n  <strong>SITUATION<\/strong>\n  <\/td><td>\n  This is an Unrealistic\n  situation.\n  <\/td><td>\n  This is a Realistic\n  situation.\n  <\/td><\/tr><\/tbody><\/table><\/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>The perfect competition and monopolistic competition are different, where monopolistic competition has features of both monopoly and perfect competition. The principal difference between these two is that in the case of perfect competition the firms are price takers, whereas in monopolistic competition the firms are price makers.<\/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=\"PERFECT AND MONOPOLISTIC COMPETITION\" 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>PERFECT AND MONOPOLISTIC COMPETITION<\/figcaption><\/figure>\n","protected":false},"excerpt":{"rendered":"<p>DIFFERENCE BETWEEN PERFECT AND MONOPOLISTIC COMPETITION In this post you will learn about perfect and monopolistic competition differences. 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 and&#8230;<\/p>\n<p class=\"more-link-wrap\"><a href=\"https:\/\/commerceiets.com\/perfect-and-monopolistic-competition\/\" class=\"more-link\">Read More<span class=\"screen-reader-text\"> &ldquo;PERFECT AND MONOPOLISTIC COMPETITION&rdquo;<\/span> &raquo;<\/a><\/p>\n","protected":false},"author":2,"featured_media":4209,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[56,113,92],"tags":[],"class_list":["post-4208","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\/4208","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=4208"}],"version-history":[{"count":0,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/posts\/4208\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media\/4209"}],"wp:attachment":[{"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/media?parent=4208"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/categories?post=4208"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/commerceiets.com\/wp-json\/wp\/v2\/tags?post=4208"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}