| Perfect Competition | Monopoly |
1. Average revenue and marginal revenue are equal.
AR = MR | 1. Average revenue is greater than marginal revenue.
AR>MR |
| 2. Price (AR) is equal to marginal Cost (MC) AR = MC | 2. Price (AR) is greater than marginal cost (MC). AR>MC |
| 3. Long-run production is possible only in constant cost conditions. | 3. Long run production is possible in all cost conditions: decreasing, constant and rising. |
| 4. Normal profit is the only possibility in long run. | 4. Profit is obtained in long-run under all the three cost conditions. |
| 5. Higher production quantity and lower price are obtained. | 5. Higher price and lower production quantity are obtained. |
| 6. Firm obtain equilibrium at its optimum size. | 6. Firm obtain equilibrium at its less than optimum size level. |
| 7. No price discrimination is possible because buyer has the perfect knowledge of the market. | 7. Price discrimination is possible which is profitable. |
| 8. Number of firms making homogeneous product is very large. | 8. Single firm in the industry i.e. firm is industry and industry is firm. |
| 9. Entry and exit of firms in the industry is free and allowed. | 9. Entry of new firm into the industry is prohibited. |
