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Monopoly refers to a market structure whereby there is a single seller dominates the whole market by marketing his distinctive product. Top top the various other hand, Monopolistic competition refers to the vain market, wherein couple of sellers in the industry offer close to substitutes to the customers.

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In economics, the market is not simply a place through which parties engage in an exchange of items or services for money yet it describes a mechanism wherein over there are numerous buyers and sellers because that a product or service having finish knowledge around market conditions, that bargain and also settle the price the the product to do the deal. The industry is classified into various categories prefer area, time, regulation, competition and so on.

Based ~ above competition, the sector is divided as perfect competition and also imperfect competition. Further, there space three species of imperfect competition, monopoly, oligopoly and monopolistic competition. Many people have trouble in knowledge the difference between syndicate and monopolistic competition, so here we’ve streamlined it for you.

Content: syndicate Vs Monopolistic Competition

Comparison Chart

Basis for ComparisonMonopolyMonopolistic Competition
MeaningMonopoly refers to a market structure where a single seller produces/sells product to big number of buyers.Monopolistic vain is a compete market setting wherein over there are numerous sellers who market differentiated commodities to a huge number that buyers.
Number that playersOneTwo to Ten or even more.
Product differentiationExtremeSlight
Degree of regulate over priceConsiderable but an extremely regulated.Some
CompetitionDoes no exist.Stiff competition exist between firms.
Demand curveSteepFlat
Barriers to entry and exitManyNo
Difference between firm and also industryNoYes


Definition of Monopoly

A form of sector structure, where the firm has actually absolute strength to produce and also sell a product or business having no near substitutes. In basic terms, monopolised sector is one where there is a single seller, marketing a product through no near substitutes come a big number of buyers. Together the firm and also industry room one and the very same thing in the monopoly market, so that is a single-firm industry. Over there is zero or an adverse cross elasticity of need for a monopoly product. Monopoly can be discovered in public utility services such as telephone, electricity and also so on.

Under this marketing setting, a certain is the price setter; however, the pricing that the product is done taking into account the elasticity of need for the product, so that the need for the product and profit will be maximum. Look in ~ the diagram given below:

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where mr = Marginal RevenueAR = typical RevenueMC = Marginal CostAC = average Cost

Definition the Monopolistic Competition

A market setup wherein scores of sellers market a differentiated product is dubbed monopolistic competition. Commodities are differentiated, by their brand name, packaging, shape, size, design, trademark, etc. Although the product marketed by different firms in the market remain nearby substitutes for the rivals, as the products are no identical however similar. Monopolistic compete is prevalent in the production industry, such as tea, shoes, refrigerators, toothpaste, TV sets, etc. The salient attributes of monopolistic vain are provided below:

A large variety of sellers.Differentiated products, however close substitutes.Free entrance into and also exit native the industry.Perfect element mobilityFull expertise of market conditions.

Under this setting, the consumer buy more when the prices of the product are lower than at greater prices. Through equating marginal revenue through marginal cost, the firm’s profit deserve to be maximised, which can be seen in the given below diagram:

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As you deserve to see in the diagram, the allude at which grandfather (Marginal Revenue) and also MC (Marginal Cost) meet, is the price level, where P1 is the price and Q1 is the output to it is in produced.


Key distinctions Between syndicate and Monopolistic Competition

The complying with points are notable so much as the distinction between monopoly and monopolistic competition is concerned:

A industry structure where a solitary seller produces/sells the product come a big number that buyers is called a monopoly. A vain market setting wherein many sellers offer differentiated products to a big number the buyers, is called monopolistic competition.There is a solitary sellers/producers in a syndicate market whereas there deserve to be 2 to ten or much more players in the monopolistic competition.In a syndicate market structure, a single product is offered by the seller and there is too much product differentiation. Top top the contrary, in a monopolistic competition, as the product readily available by different sellers are close substitutes, and also so, over there is slight product differentiation.In a monopoly market, the degree of control over price is considerable yet regulated. As versus this, in a monopolistic competition, over there is some control over price.No vain exist in a syndicate market while stubborn competition because of non-price vain exists between firms the monopolistically vain market.As there room no close substitutes the the product, need for the product in monopoly is inelastic. Together opposed to monopolistic competition, as the products offered by the various sellers are not identical however similar, for this reason its need is extremely elastic.Under monopoly, there room high entry and also exit barriers, because of the economic, legal and institutional causes. ~ above the other hand, in monopolistic competition, there is one unrestricted entrance into and exit native the industry.As a solitary firm regulates the entirety market, over there is no difference between firm and also industry in the monopoly. So, that is a single-firm industry. Unlike, monopolistic competition, the difference in between firm and also industry exists, i.e. A firm is a single entity, and also a group of firms is referred to as industry.

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Conclusion

In a syndicate market, that is possible for a firm come charge distinctive prices from miscellaneous customers, for the same product. So, the firm can adopt price discrimination policy. ~ above the other hand, together non-price vain is common in the market, therefore, price discrimination is not possible, so, no firm have the right to charge various prices from different customers.