Answer to Question #323406 in Macroeconomics for nshongore

Question

There are various market structures, under which each firm in an economy follows into, these market structures range from perfect competition to monopoly.

Answer 1

A monopolistic market and a perfectly competitive market are two market structures that have several key distinctions in terms of market share, price control, and barriers to entry. In a monopolistic market, there is only one firm that dictates the price and supply levels of goods and services, and that firm has total market control. In contrast to a monopolistic market, a perfectly competitive market is composed of many firms, where no one firm has market control.

Monopolistic and perfectly competitive markets affect supply, demand, and prices in different ways. In the real world, no market is purely monopolistic or perfectly competitive. Every real-world market combines elements of both of these market types.

 Pricing in perfect competition is based on supply and demand while pricing in monopolistic competition is set by the seller.