Perfect Competition

Monopoly

1. There are large number of buyers and sellers.
2. Goods sold by rivals are perfect substitutes.
3. Free entry into the industry exists.
4. Firm has no control over the market price.
5. Demand curve facing the firm is perfectly elastic.
6. The firm is price taker.
7. Firm’s AR=MR.
8. Price is low, output is high.

1. There is single seller but many buyers.
2. Unique product with no close substitute available in the market.
3. Strong barriers to entry exist.
4. Firm has control over market price.
5. Firm faces a downward sloping inelastic demand curve.
6. The firm is the price marker.
7. Firm’s AR>MR.

8. Price is higher, output lower than under perfect            competition.