Saturday, September 15, 2018

Perfect Competition VS Monopolistic Competition






Difference
Perfect Competition
Monopolistic Competition
No of Firms
There are large no of firms in the market
There are many firms, but lesser than firms in perfect Competition
Natural of Product
There are homogeneous products
There is product differentiation
Pricing Effect
Firm is price taker
Firm is price maker
Marginal revenue and average revenue
MR=AR & Parallel to X - axis
MR < AR, Both are downward sloping
Mobility
There is perfect mobility of factors of production
No perfect mobility
Selling cost
There is no selling cost
Substantial selling cost
Production
Goods are produced on optimum scale
Goods are produced below optimum scale



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