Difference between Monopolistic Competition and Perfect Competition

Difference between Monopolistic Competition and Perfect Competition

(i) A monopolistic competition has some Both have a large number of firms in the industry There is free entry into and exit from both markets. Both can make excess profit in the short run. degree of control over price or output, whereas a perfect competitor is a “Price taker” as price is determined by market forces.

(ii) Under perfect competition at the equilibrium output level MC, MR and Price are all equal, whereas under monopolistic competition equilibrium price is higher than both MC and MR.

(iii) There is ideal capacity under monopolistic competition but not under perfect competition in the short run.

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Somtochukwu

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Somtochukwu speaks to English hearing audiences and she writes motivational and informational books.

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