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to differentiate the features of perfect competition, monopolistic competition, oligopoly, and monopoly. Understand the term of market place where the buyers and sellers meet and transactions of goods and service take place. After that we have to giving the examples characteristics. Further onwards, I'm looking into the meant by perfect competition and how a perfect competitive firm or enterprise determines its equilibrium in short and long run.

Perfect Competition and Monopolistic Competition
Definition of Perfect Competition

Perfect Competition is a market in which there are many buyers and sellers, the products are homogeneous, and sellers can easily enter and exit from the market. All the firms sell an identical product, price takers and have a relatively small market share, buyers know the nature of the product being sold and the prices charged by each firm, the industry is characterized by freedom of entry and exit. For example, in a perfectly competitive market, should have a single firm decide to increase its selling price of a good so that the consumers can just turn to the nearest competitor for a better price.

Definition of Monopolistic Competition

A market structure in which there are large numbers of small sellers selling differentiated products but these are close substitute products and have easy entry into and exit from the market. Many products in the world represent monopolistic competition such as books, apparel, shoes, chocolates, toothpaste and many more.

Similarities of Perfect Competition and Monopolistic Competition

Perfect competition and Monopolistic competition are having the most of same characteristic.

Firm in both market are large in number and there exists freedom of entry and exit in the perfect competition and monopolistic competition market. And the firm maximizes profit when MR and MC. Thus, in long run, perfect competitive and monopolistic competitive firms earn only the normal profit, in short run the both are may earn normal profit or incur losses.

Differences between Perfect Competition and Monopolistic Competition

In the market of perfect competition, the forces of demand and supply for the entire industry determined prices. For example, in a perfectly competitive market, should a single firm decide to increase its selling price of a good, the consumers can just turn to the nearest competitor for a better price, causing any firm that increases its prices to lose market share and profits. For the monopolistic competition market, each firm has its own price policy. A perfect competition firms sell homogenous or standardized product but monopolistic competition firms sell differentiated products. Selling cost occurs only in monopolistic competition because of the product differentiation. A perfect competitive firm's demand curve is perfectly elastic and MR curve is equal to average revenue curve. But in monopolistic competitive firm, the demand curve is downward sloping and MR curve is also downward sloping, in which lies below the average revenue curve.

Monopoly and Oligopoly
Definition of Monopoly

Monopoly is a market structure in which there is a single seller and large number of buyers and selling products or can say it is a situation in which a single company or group owns all or nearly all of the market for a given typ