In terms of market type, demand and supply chain, product diversity, pricing, ease of entry and exit from the market, predictability of the products, and so on, there is a distinction between monopoly and monopolistic competition.
Monopoly Competition vs Monopolistic Competition
The main difference between monopoly and monopolistic types of competition exists in terms of the type of market, demand and supply chain, products variety, pricing, ease of entry and exit from the market, predictability of the products, etc. Only a single player participates in monopoly competition. However, on the contrary, More than one player competes against each other in monopolistic competition.
There is no competition in a Monopoly type of competition since just one vendor sells or offers one specific product in the market. The market is dominated by a single player. For the seller, there is no competition in monopolistic competition. The seller is the only one who can sell the thing, just like in the market. Because there is no competition in a monopoly market, the sole seller has complete control over demand, supply, product type and quantity, and cost. The buyer has very little control over this.
Monopolistic competition occurs when a single product is sold or offered by a large number of sellers in the market, resulting in significant market competition. There is limited competition in the situation of monopolistic competition. Despite the low degree of competition, it is insufficient to change or influence the overall demography. A monopolistic market is easier to enter and quit than a non-monopolistic one.
Comparison Table Between Monopoly and Monopolistic Competition
| Parameters of Comparison | Monopoly Competition | Monopolistic Competition |
| Type of competition | No competition | Small competition |
| Type of Market | One-seller market | More than one seller is involved. |
| Demand and supply | It solely depends on the seller. | It can be controlled. |
| Predictability of product | Highly predictable | Highly unpredictable |
| Products Variety | Variants may/may not exist, depends on the seller. | Variants exist. |
| Pricing | Decided by the seller, buyers can’t interfere. | Decided by mutual interaction of sellers and buyers. |
| Entry and exit | Extremely difficult | Moderately easy |
What is Monopoly Competition?
There is no rivalry in a Monopoly type of competition because, in the market, only one specific product is sold or offered by a single vendor. Only one participant is participating in a monopoly competition. It’s a market with only one player. There is no competition for the seller in the case of monopoly competition.
The vendor is the only one who sells the thing, just like in the market. Because there is no competition in a monopoly market, the sole seller has complete control over demand, supply, product kind and quantity, and price. Rarely, though, is it under the buyer’s control. The intensity of demand and supply under a monopoly kind of competition is strongly dependent on the seller.
The demand and supply chain, however, is not the Seller side biassed due to the characteristics of the goods and commodities. It’s difficult to break into a monopoly market. The exit is as well. Because only one vendor is present in a monopoly kind of market competition, the predictability of the items is quite high.
What is Monopolistic Competition?
Monopolistic competition occurs when a single product is sold or offered by a large number of sellers, resulting in significant market competition. More than one player is involved in a monopolistic competition to compete against one other.
Small competition exists in the case of monopolistic competition. Despite the lack of rivalry, the level of competitiveness is insufficient to change or alter the general demographics. Buyers can influence the prices or demand of goods because monopolistic competition exerts a significant level of competition in the market.
Control over demand and the supply chain can be quickly regained under a Monopolistic kind of market completion. A monopolistic market is easier to enter and depart than a competitive market. Any product projections in a monopolistic style of market competition are highly uncertain.
Main Differences Between Monopoly and Monopolistic Competition
- In a Monopoly type of competition, there is no competition, as in the market, one specific product is sold or offered only by a single seller. On the other hand, when in the market, one product is being sold or offered by a lot of sellers creating a considerable amount of competition in the market is called monopolistic competition.
- In monopoly competition, only a single player is involved. It’s a one-player market. On the other hand, in monopolistic competition, more than one players are present to give competition to each other.
- In the case of monopoly competition, for the seller, no competition exists. As in the market, the seller is the only one who sells the product. On the other hand, in the case of monopolistic competition, small competition exists. Although the competition is minimal, the level of competition is not high enough for modifying or affecting the overall demographics.
- Due to the lack of competition in the monopoly type of market, the demand, supply, the type and amount of products, their cost, everything is controlled by the single seller. However, very rarely, it is in the buyer’s control. On the other hand, as Monopolistic competition exerts a considerable amount of competition in the market, buyers are capable of controlling the prices or demand of goods.
- In the case of the monopoly type of competition, the intensity of demand and supply highly depends upon the seller. However, due to the characteristic of the goods and commodities, the demand and supply chain is not Seller side biased. On the other hand, in a Monopolistic type of completion in the market, the control on demand and supply chain can be easily restored.
- Entering into a monopoly type of market is challenging. So is the exit. On the other hand, both entry and exit from a monopolistic type of market are comparatively easier.
- In a monopoly type of market competition, the predictability of the products are highly predictable as only one seller is present. On the other hand, in a monopolistic type of market competition, any predictions on the products in highly unpredictable.
Conclusion
The intensity of demand and supply is greatly dependent on the seller in monopoly competition. In contrast, buyers can influence the price or demand of goods because monopolistic competition imposes a significant level of competition in the market.
In a monopoly market, the demand and supply chain, however, is not Seller-biased because of the characteristics of the goods and commodities. It might be difficult to break into a monopoly market. The exit is, too. Because there is just one seller in a monopoly type of market competition, product predictability is great.
Control over demand and the supply chain can be quickly restored in a market with a Monopolistic form of completion. Predictions about products are particularly uncertain under a monopolistic sort of market competition.
References
- https://link.springer.com/chapter/10.1007/978-1-349-19802-3_23
- https://onlinelibrary.wiley.com/doi/abs/10.1111/poms.12373