Monopoly Vs Perfect Competition – Answered

Whether a firm is operating under PC or under MONOPOLY the objective or the goal of the firm is to maximize the profits. This suggests rationality on the part of the producer of both the market. In both the models the owner of the firm is also the manager entrepreneur there is no separation of ownership and management in both the models. In both the models profits maximization condition is satisfied when the necessary and sufficient condition are fulfilled.
The product is homogeneous in poor competition while in monopoly the product may or may not be homogeneous. In monopoly the total supply of the product is concentrated in single firm. While under prefect computation there are large numbers of sellers and none of them can influence the price by changing his price.
As PC and monopoly models are traditional models. Accordingly both depends upon the traditional cost concepts and curves. I other word the behavior both the models are explained with the help of U shaped cost curves. Shaped cost curves both in SR and LR.
Such cost curve suggests that from each plant specific level of output can be produced.
Monopoly is often considered to be inefficient compared to perfect competition.
1.Compare and contrast monopoly with perfect completion. Use graphical as well as verbal explanation. (View Sample Answer)
2.List and discuss the sources (reasons) of monopoly inefficiency. (View Sample Answer)
This writing assignment should be three pages. Two pages for paper and one page for work cited.
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