FIN Solved.docx - Name Tutor Institutions Date Q1 Discuss similarities and dissimilarities of monopoly and monopolistic competition Monopoly competition

FIN Solved.docx - Name Tutor Institutions Date Q1 Discuss...

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Name: Tutor: Institutions: Date Q1. Discuss similarities and dissimilarities of monopoly and monopolistic competition. Monopoly competition refers to when a single corporation owns majority or all of market for a service or product sold. The existence of a monopoly market has the meaning that a single seller has the market power, resulting in low competition levels. An example of the monopoly situation is the public monopolies that are developed by the governments for the provisioning of public utilities such as electricity and water. On the other hand, monopolistic completion refers to that market with a large number of buyers as compared to the sellers. Similarities: In both the monopoly and monopolistic competition the aspect of equilibrium is at equality of the Marginal Revenue, and the Marginal Cost. Whereby, the Marginal Cost cuts the Marginal Revenue from the below. In both the monopolistic and monopoly competition, the demand curve slopes down to the right and the resultant Marginal Revenue (MR) curve comes from below. In both situations, the producer or the seller is the price-maker or sets the price in the market. He/she can either lower or raise the price.
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  • Summer '18
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