Answer to Question #225899 in Microeconomics for Devil

Question

Distinguish between Monopoly and Monoopolistic competition market & explain the social cost 

of monopoly.

Answer 1

A monopoly is kind of competition where a seller captures the majority of the market share due to lack of competitors.

While monopolistic competition is kind of competition in which the seller try to capture the market share by differentiating their products.

Monopoly creates a social cost, know as dead weight loss.

This is because some consumers who would be willing to pay for the goods and services up to its marginal cost, are not served