Khushi

Saraswati vidya mandir mahila mahavidyalaya,
aryanagar North gorakhpur

Presentation On
Topic:- The Comparitive Study Between Monopolistic
Market and Monopoly Market
Presented By:- Khushi Agarwal
Roll no:- 2412657450012
Mcom 1 st semester (2023-24)
Department of commerce
Guided by- Dr. Geeta mam
MARKET STRUCTURE
The Market Structure refers to the characteristics of the market either organizational or
competitive, that describes the nature of competition and the pricing policy followed in the
market
Thus, the market structure can be defined as, the number of firms producing the identical
goods and services in the market and whose structure is determined on the basis of the
competition prevailing in that market.
The term “ market” refers to a place where sellers and buyers meet and facilitate the selling
and buying of goods and services. But in economics, it is much wider than just a place, It is a
gamut of all the buyers and sellers, who are spread out to perform the marketing activities.
Types of Market Structure
Monopoly Market
Definition: The Monopoly is a market structure characterized by a single seller, selling the
unique product with the restriction for a new firm to enter the market. Simply, monopoly is a
form of market where there is a single seller selling a particular commodity for which there
are no close substitutes.
Features of Monopoly Market
Under monopoly, the firm has full control over the supply of a product. The
elasticity of demand is zero for the products.
 There is a single seller or a producer of a particular product, and there is no
difference between the firm and the industry. The firm is itself an industry.
 The firms can influence the price of a product and hence, these are price makers,
not the price takers.
 There are barriers for the new entrants
 The demand curve under monopoly market is downward sloping, which means the
firm can earn more profits only by increasing the sales which are possible by
decreasing the price of a product
 There are no close substitutes for a monopolist’s product
Advantage
 Monopoly avoids duplication and hence avoids wastage of resources.
 A monopoly enjoys economies of scale as it is the only supplier of product or service in the
market. The benefits can be passed on to the consumers.
 Due to the fact that monopolies make lots of profits, it can be used for research and
development and to maintain their status as a monopoly.
 Monopolies may use price discrimination which benefits the economically weaker sections of
the society.
 Monopolies can afford to invest in latest technology and machinery in order to be efficient
and to avoid competition
Disadvantage
 Poor level of service.
 Consumers may be charged high prices for low quality of goods and services.
 Lack of competition may lead to low quality and out dated goods and services.
 No consumer sovereignty. A monopoly market is best known for consumer exploitation.
There are indeed no competing products and as a result the consumer gets a raw deal in
terms of quantity, quality and pricing
Monopolistic Competition
Definition: Under, the Monopolistic Competition, there are a large number of firms that produce
differentiated products which are close substitutes for each other. In other words, large
sellers selling the products that are similar, but not identical and compete with each other on
other factors besides price.
Diagram of Monopolistic Competition
Merits of Monopolistic Competition:
 An important merit of monopolistic competition is that it is much closer to reality than
several other models of market structure. Firstly, it incorporates the facts of product
differentiation and selling costs. Secondly, it can be easily used for the analysis of duopoly
and oligopoly
 Under monopolistic competition it is possible to see that even when each individual firm
produces under conditions of increasing returns, not only the firm under consideration but
also the entire group of firms can be in equilibrium.
 In monopolistic competition we are able to consider the interaction between several
interdependent variables on the basis of which a firm takes its decisions.
Demerits of Monopolistic Competition:

 The biggest conceptual difficulty with monopolistic competition is the concept of age group
of firms. There is no standard theoretical foundation for deciding the boundaries of a
group.
 Related with the concept of a group of firms, we face the difficulty of defining the meaning
of a ‘close substitute’. We are not told at what values of cross elasticity, two products
become close substitutes of each other

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Saraswati vidya mandir mahila mahavidyalaya,

aryanagar North gorakhpur

Demerits of Monopolistic Competition:

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