Differences Between Monopoly And Monopolistic Competition

2. Identity and explain the similarities and difference seen with Monopoly and Monopolistic Competition. Which of these forms of competition is more common? Why? A monopoly is a firm that can determine the market price of a good, and in extreme cases, a monopoly maybe the only seller of a good or service. For any amount of monopoly power to continue to exist in the long run, the market must be closed to entry in some way. This can be done in a legal way by asking people to obtain a license, patents, regulations, and taxes. Another way is just the cost of running a business in that industry that prevents people from entering. Additionally, sometimes a monopoly may just occur naturally when it is not profitable to have multiple firms in the same industry. Therefore, a natural monopoly arises when there are large economies of scale relative to the industry s demand such that one firm can produce at a lower average cost that can be achieved by multiple firms. A Monopolistic Competition is when a market situation in which a large number of forms produce similar but not identical products, making it easier to enter the industry. Monopolist Competition does have a significant number of sellers in a highly competitive market, differential products, sales promotion and advertising, and easy entry of new firms to the industry. Monopolist Competition is more common as a result because of how easy it is to enter the market. 4. Pick two products that you believe are very elastic,Show MoreRelatedAn explanation of monopoly, oligopoly, perfect competition, and monopolistic competition - a detailed overview946 Words   |  4 Pages(public companies). One of the key determinates to a successful national economy is the structure of its markets. The main market structures are: 1. Monopoly 2. Oligopoly 3. Perfect Competition 4. Monopolistic Competition Each of these market structures have unique characteristics, and can be classified according to three factors. The degree of competition, the first factor, is important as it classifies markets into different market structures. It compares the relative sizes of firms, the amount ofRead MoreThe Various Shades Of Monopolies And Perfect Competition1003 Words   |  5 PagesThe Various Shades of Monopolies and Perfect Competition Robert Sturdevant Embry-Riddle Aeronautical University â€Æ' Abstract Monopolies are always known to hold a limited amount of control over its particular market and that gives them the dominant ability to control the prices for its goods or services, or in other words, they represent the market. They indeed have detrimental effects on consumer and social welfare, which is why most do not agree with them. 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Therefore, the economists from time to time classified the various market structures on the basis of time, area and competition. Here we are going to see about Market Structures on the basis of Competition. On the basis of competition a market may be of following typesRead MoreOligopoly Versus Monopoly Competition Essay1475 Words   |  6 PagesEssay v. Assignment Title : Differences between oligopoly and monopolistic competition market structures. vi. Tutor name : Hind Francesca vii. Student ID : 200893206 viii. Date of submission : 15/3/2012 ix. Word Count : 986 Differences Between Oligopoly and Monopolistic Competition Market Structures Market structure refers to the interconnected characteristics of a market, which include the number of firms, level and forms of competition and extent of product differentiation