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

1. Perfect competition is a type of market where there are large number of firms producing homogeneous product.
2. The product sold are homogeneous and so they are perfect substitutes.
3. The firm is a price taker so the demand curve is a horizontal demand curve.
4. There is free entry and free exit.
5. Single price prevails in the whole market.
   
   

Monopoly:

1. Monopoly is a type of market where there is only one firm producing a product which has no substitute.
2. The product has no substitute.
3. The firm is a price maker. Thus firm has a downward sloping demand curve.
4. There are strong entry barriers.
5. Price discrimination is possible because seller has complete hold in the market.