Differences and similarities between pure monopoly and monopolistic competitive markets

Differences

• In pure monopoly there is only one producer/seller/firm while in competitive monopolistic competitive markets there are many producers i.e. no completion exist in pure monopoly while competition exists in monopolistic competitive markets
• In pure monopoly entry to the market is blocked while in monopolistic competitive market, there is free entry and exit
• In pure monopoly there is no persuasive advertisement while in competitive monopolistic market there is persuasive advertisement
• The demand/average revenue curve in pure monopoly is inelastic while that of competitive monopolistic market is elastic
• In pure monopoly one product without close substitute is produces while in monopolistic competitive market firms produce differentiated products
• In the long run, pure monopoly firms earn abnormal profits while monopolistic competitive markets earn normal profits
• In pure monopoly a form practices price discrimination which is not the case in competitive monopolistic market.

Similarities between pure monopoly and monopolistic competitions

• Existence of excessive capacity /produce less than installed capacity.
• The producer/seller/firms in both are price markers
• The demand//AR curves in both are down sloping from left to right
• In firms in both situations earn abnormal profits
• Both market attains equilibrium output at a point where P= AR but greater than MR =MC
• In both market situations, there are many byers/customers.