What is the difference between monopoly and monopolist competition? Explain the characteristics of firm’s equilibrium under monopolistic competition.

Difference Between Monopoly and Monopolistic Competition

Monopoly:

1. Definition: A market structure where a single firm dominates and has complete control over the market, with no close substitutes for its product.
2. Market Control: The monopolist has significant market power and acts as a price maker.
3. Entry and Exit Barriers: High entry and exit barriers prevent other firms from entering the market.
4. Product Differentiation: The product offered is unique with no substitutes.
5. Demand Curve: The demand curve for the monopolist is downward-sloping, representing the entire market demand.
6. Example: Public utilities like electricity supply in many regions operate as monopolies.

Monopolistic Competition:

1. Definition: A market structure where many firms operate, selling similar but not identical products, and compete with each other.
2. Market Control: Firms have limited market power due to product differentiation.
3. Entry and Exit Barriers: There ______ _______ ___ ____ _________ ________ ________ ___.
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