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InterviewSolution
| 1. |
Distinguish between perfect competition market and monopolistic competition market |
| Answer» \tBASIS FOR COMPARISONPERFECT COMPETITIONMONOPOLISTIC COMPETITIONMeaningA market structure, where there are many sellers selling similar goods to the buyers, is perfect competition.Monopolistic Competition is a market structure, where there are numerous sellers, selling close substitute goods to the buyers.ProductStandardizedDifferentiatedPriceDetermined by demand and supply forces, for the whole industry.Every firm offer products to customers at its own price.Entry and ExitNo barrierFew barriersDemand Curve slopeHorizontal, perfectly elastic.Downward sloping, relatively elastic.Relation between AR and MRAR = MRAR > MRSituationUnrealisticRealistic\t | |