Give any three points of difference between monopoly and monopoli… - Vidyadip

Question

Give any three points of difference between monopoly and monopolistic competition.

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Answer

Monopoly differs from monopolistic competition in the following ways:

Under monopoly, there is a single seller of a product, whereas under monopolistic competition there are large number of sellers (firms) selling a product.
A monopolist produces or sells a product which has no close substitutes. On the other hand, the various firms working under monopolistic competition produce and sell differentiated products, which are close substitutes of each other.
In case of monopoly, there are strong barriers to the entry of new firms in the industry. Whereas under monopolistic competition there is free entry of new firms in the industry, as there are no restrictions on their entry.

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