This document compares and contrasts the key characteristics of perfect competition and monopoly market structures. It discusses that perfect competition has many small firms each taking prices as given, while monopoly has a single firm with total market control setting prices. The document outlines differences in available substitutes, resource mobility, information, and other defining features between these two market structures.

1. POST GRADUATE DIPLOMA IN MANAGEMENT
(PGDM –ii Sem)
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2. Comparative analysis of perfect
competition and monopoly
 PERFECT COMPETITION:
Monopoly is a market structure with
complete market control. As the only seller in
the market, a monopoly controls the supply-side
of the market
Pure
Perfect
Monopoly
Competition
More competitive (fewer imperfections)

3.  MONOPOLY:
Monopoly is a market structure with
complete market control. As the only seller in
the market, a monopoly controls the supply-side
of the market
Pure
Perfect
Monopoly
Competition
Less competitive

4. Number of Firms
 PERFECT COMPETITION:
Perfect competition is an industry
comprised of a large number of small
firms, each of which is a price taker with no
market control.
 MONOPOLY :
Monopoly is an industry
comprised of a single firm, which is a price
maker with total market control.

5. Available Substitutes
 PERFECT COMPETITION:
Every firm in a perfectly
competitive industry produces exactly the same
product as every other firm. An infinite number
of perfect substitutes are available.
 MONOPOLY:
Monopoly firm produces a unique
product that has no close substitutes and is
unlike any other product.

6. Resource Mobility
 PERFECT COMPETITION:
Perfectly competitive firms have
complete freedom to enter the industry or exit
the industry. There are no barriers.
 MONOPOLY:
A monopoly firm often achieves
monopoly status because the entry of potential
competitors is prevented.

7. Information
 PERFECT COMPETITION:
Each firm in a perfectly competitive
industry possess the same information about
prices and production techniques as every other
firm.
 MONOPOLY:
A monopoly firm, in contrast, often
has information unknown to others.

8. Characteristics of Perfect Competition
 Consumers pay the full price of the product.
 There is a large number of buyers and
sellers, each of which is small relative to the
total market.
 All firms in the same industry produce a
homogeneous product.
 No barriers to entry or exit exist.
 All economic agents possess perfect
information.

9. Characteristics of Monopoly
 One seller.
 Homogeneous or differentiated product.
 Complete barriers to entry.
 The two most common barriers to entry:
 Economies of scale.
 Legal restrictions.