ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Perfect competition is theoretically the opposite of a monopoly, in which only a single firm supplies a good or service and that firm can charge whatever price it wants since consumers have no alternatives and it is difficult for would-be competitors to enter the marketplace.

Detailed explanation-2: -In a monopolistic market, there is only one firm that dictates the price and supply levels of goods and services. A perfectly competitive market is composed of many firms, where no one firm has market control. In the real world, no market is purely monopolistic or perfectly competitive.

Detailed explanation-3: -A monopoly is when a single company produces goods with no close substitute, while an oligopoly is when a small number of relatively large companies produce similar, but slightly different goods.

Detailed explanation-4: -In perfect competition, there are many small companies, none of which can control prices; they simply accept the market price determined by supply and demand. In a monopoly, however, there’s only one seller in the market.

Detailed explanation-5: -The correct answer is b. Because costs do not depend on market structure, the price is usually higher, and output is always lower under monopoly than perfect competition.