Answer to Question #319679 in Microeconomics for Welcome

Question

Explain the essential difference between perfect competition and monopolistic competition

Answer 1

A monopolistic market and a perfectly competitive market are two market structures that differ significantly in terms of market share, price control, and entry barriers.

In a monopolistic market, only one firm dictates the price and supply levels of goods and services. That firm has total market control. In contrast to a monopolistic market, a perfectly competitive market is composed of several firms, where no one firm has market control.