Perfect Competition :
(a) Infinitely large number of firms
(b) Homogeneous products
(c) Firms have no control over price.
(d) Demand is infinitely elastic.
(e) Demand curve (AR) is a straight line parallel to horizontal axis shown below.
(f) P = MC at equilibrium point.
(g) No selling costs incurred
(h) Price is lower than the price in monopolistic competition.
(i) AR = MR
Monopolistic competition:
(a) A large numbers of firms
(b) Differentiated products
(c) Firms have some control over price.
(d) Demand is more elastic.
(e) Demand curve is a flatter downward showing greater elasticity.
(f) P>MC at equilibrium point.
(g) Selling costs are important features in this competition.
(h) Price is higher than competitive price due to the monopoly element.
(i) AR > MR or MR < AR
