PERFECT COMPETITION MONOPOLY

24.     PERFECT COMPETITION

MONOPOLY

1.      Meaning It is a market structure in which there is a high degree of competition because there are a large number of sellers. 2.      Nature of product The product is homogeneous and therefore perfect substitute. 3.      Price taker/maker The firm is price taker. Thus, the firm has horizontal demand curve.                                                     4.      Barriers There is free and exit. 5.      Price Discrimination Price discrimination is not possible as consumers have complete knowledge about the market.

There is no competition. There is only one seller in the market. The product has no close substitute. The firm is a price maker. Thus, the firm has a downward sloping demand curve. Barriers There are strong entry barriers. Price discrimination is possible as sellers has complete hold over the market.