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  • 1. POST GRADUATE DIPLOMA IN MANAGEMENT (PGDM –ii Sem)Submitted To: Submitted By:
  • 2. Comparative analysis of perfect competition and monopoly PERFECT COMPETITION: Monopoly is a market structure with complete market control. As the only seller in the market, a monopoly controls the supply-side of the market Pure Perfect MonopolyCompetition More competitive (fewer imperfections)
  • 3.  MONOPOLY: Monopoly is a market structure with complete market control. As the only seller in the market, a monopoly controls the supply-side of the market Pure Perfect MonopolyCompetition Less competitive
  • 4. Number of Firms PERFECT COMPETITION: Perfect competition is an industry comprised of a large number of small firms, each of which is a price taker with no market control. MONOPOLY : Monopoly is an industry comprised of a single firm, which is a price maker with total market control.
  • 5. Available Substitutes PERFECT COMPETITION: Every firm in a perfectly competitive industry produces exactly the same product as every other firm. An infinite number of perfect substitutes are available. MONOPOLY: Monopoly firm produces a unique product that has no close substitutes and is unlike any other product.
  • 6. Resource Mobility PERFECT COMPETITION: Perfectly competitive firms have complete freedom to enter the industry or exit the industry. There are no barriers. MONOPOLY: A monopoly firm often achieves monopoly status because the entry of potential competitors is prevented.
  • 7. Information PERFECT COMPETITION: Each firm in a perfectly competitive industry possess the same information about prices and production techniques as every other firm. MONOPOLY: A monopoly firm, in contrast, often has information unknown to others.
  • 8. Characteristics of Perfect Competition Consumers pay the full price of the product. There is a large number of buyers and sellers, each of which is small relative to the total market. All firms in the same industry produce a homogeneous product. No barriers to entry or exit exist. All economic agents possess perfect information.
  • 9. Characteristics of Monopoly One seller. Homogeneous or differentiated product. Complete barriers to entry. The two most common barriers to entry:  Economies of scale.  Legal restrictions.