ECONOMICS. Economics. 4/11/2019. ECONOMICS. 1. Q1 Perfe

Running head: ECONOMICS
Economics
4/11/2019

ECONOMICS 1
Q1
Perfect Competition
According to Antonioni and Rashid (2016), perfect competition defined as a market structure
where competition is experienced at the highest level. A perfectly competitive market is
comprised of a large number of buyers as well as sellers, along with zero cost of
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As stated by Agarwal (2013), to increase the profit in the perfect competitive market
structure, businesses involved in the market set equal marginal revenue to marginal cost,
which can be presented like (MR=MC). MR is said to be the revenue curve that is equal to
the (D) and (P) that is the demand curve and price. In the short run, it is conceivable for
economic incomes or profits to be negative, zero, or positive.
Source [(Lumen, 2019)]

ECONOMICS 2
Monopoly Competition
According to Mosca (2018), Monopoly competitive market is said to be a structure of the
market that is categorized by a single seller, vending an exclusive service or product in the
market. In the monopoly market, there is no rivalry for the vendors as he/she is the single
seller of services or goods with no close substitute (Posner and Weyl, 2018).
Difference between Perfect competition and Monopoly Competition
 In a perfectly competitive market, there are a large number of sellers and buyers in the
market, but in the monopoly market, there is only a single seller but a large number of
buyers.
 According to Kumagai (2012), in the Perfect Competitive market, the offered
products are homogeneous but in the monopoly market, there is no availability of
close substitute product or service. Under the monopoly market, there is no
competition.
 It is generally said that companies working in a perfectively competitive market are
price takers and companies operating in the monopoly market are price makers.
 According to Mankiw and Taylor (2006), in the perfectly competitive market, there is
a well-organized distribution of resources and keeps the burden on the manufacturer
to maintain the cost of production down. In contrast, under the monopoly market,
there is a restriction of output, unproductive expenses, and higher production cost.
 According to Kamich (2010), Entry barriers are very limited under perfectly
competitive market whereas in the monopoly market there are barriers to the entry.
 According to Hoskins, McFadyen and Finn (2004), in the perfectly competitive
market at the equilibrium output, the price is equal to marginal cost, whereas, in the
monopoly market, the price is higher than the average cost.