Differences between perfect competition and monopoly

Differences between perfect competition and monopoly

Basis	Perfect competition	Monopoly
1. Number of firms	There is a large number of firms in an industry under perfect competition.	In the case of a monopoly, there is only one firm under the industry.
2. Objective	The objective is sales maximization.	The objective is profit maximization.
3. Entry and exit condition	Firms are free to enter and exit from the industry under this market.	In the case of monopoly, there is a strict barrier in the entry and exit of the firm .
4. State of profit	In the long run, a firm earns only a nominal profit in perfect competition	In the case of monopoly, the firm can enjoy supernormal profit in the long run.
5. Nature of AR and MR curves	Under perfect competition, both AR and MR curves are equal and parallel to the x-axis.	Under monopoly, both AR and MR curves are downward sloping.
6. Price	The price is uniform and stable.	The price may change.
7. Buyers and sellers	There are large numbers of buyers and sellers.	There is a single seller and multiple buyers.
8. Price making	They are price takers.	They are price makers.
9. Nature of production	Under perfect competition, the products are homogeneous.	Under monopoly, products are unique.