Distinguish between monopoly and perfect competition on the basis of:�

1.	Distinguish between monopoly and perfect competition on the basis of: (i) AR curve. (ii) Control over the market price.
Answer» Average Revenue curve: In monopoly competition, AR curve i.e. Demand curve is inelastic so it is a negatively sloping curve, whereas in Perfect competition as AR curve i.e. Demand curve is perfectly elastic to it is a horizontal line parallel to X-axis as shown below. Control over market price: In monopoly competition, a monopoly firm has full control over the prices of the commodity. A monopolist is Price maker whereas, in Perfect competition, a firm can’t have any influence on the market price, it is considered price taker only.

Distinguish between monopoly and perfect competition on the basis of: (i) AR curve. (ii) Control over the market price.

Answer»

Average Revenue curve: In monopoly competition, AR curve i.e. Demand curve is inelastic so it is a negatively sloping curve, whereas in Perfect competition as AR curve i.e. Demand curve is perfectly elastic to it is a horizontal line parallel to X-axis as shown below.

Control over market price: In monopoly competition, a monopoly firm has full control over the prices of the commodity. A monopolist is Price maker whereas, in Perfect competition, a firm can’t have any influence on the market price, it is considered price taker only.

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