ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In contrast, whereas a monopolist in a monopolistic market has total control of the market, monopolistic competition offers very few barriers to entry. All firms are able to enter into a market if they feel the profits are attractive enough. This makes monopolistic competition similar to perfect competition.

Detailed explanation-2: -Low Barriers to Entry In monopolistic competition, one firm does not monopolize the market and multiple companies can enter the market and all can compete for a market share. Companies do not need to consider how their decisions influence competitors so each firm can operate without fear of raising competition.

Detailed explanation-3: -A market with perfect competition features zero barriers to entry. Under perfect competition firms are unable to control prices, and produce similar or identical goods. This means that firms cannot operate strategic barriers to entry.

Detailed explanation-4: -One of the key similarities that perfectly competitive and monopolistically competitive markets share is elasticity of demand in the long-run. In both circumstances, the consumers are sensitive to price; if price goes up, demand for that product decreases. The two only differ in degree.

Detailed explanation-5: -A perfectly competitive market is a theoretical market structure where all companies offer homogeneous products, there are no barriers to entry, there are no influential buyers or sellers and there is complete transparency of goods.