Question

Discuss any four differences between monopoly and monopolistic competition.

Distinguish between monopoly and monopolistic competition.

In what ways does monopoly differ from monopolistic competition?

Answer 1

S. No.	Basis	Monopoly	Monopolistic competition
1.	Number of Sellers	There exists only single seller.	There are a large number of small sellers.
2.	Product	Monopolist may sell homogeneous or differentiated products	Products are different but are close substitute of one another.
3.	Entry of Firms	Entry of new firms in the market is restricted.	Free entry or exit of firms into the market.
4.	Selling Costs	Only informative selling costs are incurred.	Huge amount of money is spent on advertisements, etc.