Differentiate between monopoly and oligopoly on the basis of 1) nature of the product 2) number - Economics - The Theory of The Firm Under Perfect Competition

Question

Differentiate between monopoly and oligopoly on the basis of
1) nature of the product
2) number of buyers ans sellers
3) degree of knowledge
4) entry and exit of firms
5) shape of curves
6) decision making
7) selling cost
8) price
9) nature of profits in long run
10) innovation and selling cost
11) output
12) mobility

Payal Goyal · Accepted Answer

Dear Student,
Difference between oligopoly and monopoly on the basis:

basis
monopoly
oligopoly

1) nature of product
unique product, no close substitutes
differentiated product

2)no of buyer and sellers
one seller, many buyers
few large sellers, many buyers

3)degree of knowledge
customers have full knowledge as there is no close substitutes
of product

customers have less degree of competition in comparison of
monopoly

4)entry and exit of firms
there is no freedom of entry and exit due to patent rights
there is more degree of freedom of entry and exit as compared
to monopoly

5)shape of curves
negative sloping straight line from left to light
In oligopoly, there is no curve determined

6)decision making
The decision making is done by the firm itself
The decisions are taken by determining other firms' output and
price policy

7)selling cost
selling cost is less in monopoly
there is more amount of selling cost in comparison of
monopoly

8) price
prices are charged high
prices are charged according to other firms

9) nature of profits in long run
They earn abnormal profits
Nature of profits is normal profits

10)innovation and selling cost
There is a large amount of innovation required and no selling
cost is incurred
There is large amount of innovation required

11)output
In monopoly, they can sell more output only when they lower
their prices
They decide their output level by seeing the output level of
other firms

12)mobility
There is no mobility of factors of production
There is mobility of factors of production

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basis	monopoly	oligopoly
1) nature of product	unique product, no close substitutes	differentiated product
2)no. of buyer and sellers	one seller, many buyers	few large sellers, many buyers
3)degree of knowledge	customers have full knowledge as there is no close substitutes of product.	customers have less degree of competition in comparison of monopoly.
4)entry and exit of firms	there is no freedom of entry and exit due to patent rights.	there is more degree of freedom of entry and exit as compared to monopoly .
5)shape of curves	negative sloping straight line from left to light	In oligopoly, there is no curve determined .
6)decision making	The decision making is done by the firm itself.	The decisions are taken by determining other firms' output and price policy.
7)selling cost	selling cost is less in monopoly.	there is more amount of selling cost in comparison of monopoly.
8) price	prices are charged high	prices are charged according to other firms .
9) nature of profits in long run	They earn abnormal profits.	Nature of profits is normal profits.
10)innovation and selling cost	There is a large amount of innovation required and no selling cost is incurred.	There is large amount of innovation required.
11)output	In monopoly, they can sell more output only when they lower their prices.	They decide their output level by seeing the output level of other firms.
12)mobility	There is no mobility of factors of production.	There is mobility of factors of production.