Forms of Market — Economics STD 12 Commerce / Arts — Question

1. Monopoly is a market structure in which there is a single seller of a product which has no close substitute.
2. There is no competition.
3. There are strong barriers to entry.
4. The demand for the product is less elastic as there are no close substitute.
5. There is no selling cost incurred.
6. Firm and industry are identical.
7. Pure monopoly is an inelastic market.

Monopolistic Competition:

1. It is a market structure in which large number of firms produce and sell products that are differentiated but close substitutes.
2. There is competition among the firms producing very close substitutes.
3. There is free entry and exit for the firms.
4. Demand of the product is elastic as there are close substitutes for the product.
5. Selling cost has an important role in Monopolistic Market.
6. Under monopolistic competition firm and industry are not identical. They are a group.
7. It is a realistic market.