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Difference between monopolistic and perfect competition

What's the difference between monopolistic competition, and perfect competition market models? Please use examples from the real life.

What's the pricing and non pricing strategies that firms rely on to compete in monopolistic competition and oligopoly market models.

What are the strategies that firms rely on in monopoly and oligopoly to sustain their economic profits overtime? Please use examples from your work or real life.

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The difference between monopolistic and perfect competition comes down to the fact that a monopoly controls the quantity of product in the market while in perfect competition firms are too small and cannot control the amount of product in the market. As a result, monopolists can chose a quantity (where MR=MC) to set a price that maximizes their profit and allows them to received economic profits. In perfect competition, on the hand, a large number of small producers with no barriers to entry have no control over quantity, their collective supply is the supply of the market and changing their individual production has no effect on price. This is why MR equals demand and price for individual producers in perfect competition. Because of this lack of control and ...

Solution Summary

What's the difference between monopolistic competition, and perfect competition market models? Please use examples from the real life.

What's the pricing and non pricing strategies that firms rely on to compete in monopolistic competition and oligopoly market models.

What are the strategies that firms rely on in monopoly and oligopoly to sustain their economic profits overtime? Please use examples from your work or real life.

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