Answer to Question #209855 in Microeconomics for marya

Question

Compare pure competition and Monopoly in terms of i)No. of firms in industry, ii) Type

of product, iii) control over price, iv) conditions of entry v) Example

Answer 1

I)Number of firms in the industry

There are many sellers with identical products in a pure competition market, while in a monopoly market, there is only one seller.

Ii) Type of product

In pure competition, the product has close substitutes, while in a monopoly market, the product has no close substitute.

 Iii) control over price

In pure competition, price is controlled by the market supply and demand, while in monopoly, the seller is the price maker.

 Iv) conditions of entry

There is free entry in a pure competition market, while there are barriers to entry in a monopoly market.

 V) Example

Examples of products in the pure competition are agricultural products, while an example of a monopoly is the DeBeer and Diamonds.