Distinguish Between the main Features of Perfect Competition and Monopoly Market Structure

Distinction of main features of complete competition and monopoly market structure There are three main features that distinguish between perfect competition and exclusive market structure: company type, freedom of entry and product nature (Sloman and Norris 1999, pg) 161). A table of these functions is included in Appendix A. Since the two market structures are at both ends of the scale, the functions and advantages of each structure are very different.

Monopolistic competition - a market structure that combines the characteristics of perfect competition and specific elements of monopoly structure. Main parameters of exclusive competition. There are many medium-sized enterprises in the market, but the completely competitive market structure is not so. As the company produces similar but not identical products, the result: the company can freely enter and exit the market under the same conditions as complete competition. But in the context of competitive monopoly, companies should spend more on advertising. Operation of design differences, safety of development, utilization of ecology, aesthetic quality.

Exclusive and perfect competition shows the extremes of the market structure, but in a completely competitive market there are some similarities between companies and monopolies. Both are faced with the same cost and production function, trying to maximize profit. The final decision is the same, we assume that the two have completely competitive element markets. However, there are some important differences. In a completely competitive market, the price is equal to marginal cost and the company's economic benefit is zero. With monopoly, the price is higher than the marginal cost, the company gains positive economic interests. Complete competition creates a balance that product prices and quantities are economically efficient. Monopoly creates a balance that products are more expensive, cheaper, and more economically efficient. For this reason, the government often monitors the monopoly and is trying to promote intensified competition.

Complete competition, monopolistic competition, oligopoly and monopoly each have their own unique characteristics. The characteristics of the four markets are not the same. With monopoly, there is only one producer and seller of products in the market structure. Oligopoly is a small number of companies making up the industry and the selected group of companies can manage prices. Monopoly and oligopoly have high entry barriers. So the monopoly structure is the opposite of perfect competition. Many items are similar in nature and have many alternatives.