Monopolistic Competition Perfect Competition
Monopolistic Competition Perfect Competition
Perfect Competition
No barriers to entry and exit of firms.
No barriers for firms to enter or exit.
A very large number of firms are present.
A very large number of firms are present in the market.
Not all products are homogeneous therefore product
All firms produce homogeneous products, therefore no product differentiation takes.
differentiation.
Producers try to increase their market share by differentiating
All firms are price takers, not price setters. their products.
It is an ideal and most efficient market as prices are as lowest The price charged by the producer is not a socially optimal
as possible. price.