| Definition |
A market structure where many firms sell identical products and no single seller controls the price. |
A market structure where firms have some control over price due to product differences or market power. |
| Number of Sellers |
Large number of sellers. |
Few to many sellers, depending on the type (monopoly, oligopoly, monopolistic competition). |
| Product Type |
Homogeneous or identical products. |
Differentiated products (by quality, brand, features, etc.). |
| Price Control |
No control; prices are determined purely by supply and demand. |
Sellers have varying degrees of price-setting power. |
| Entry and Exit |
Free entry and exit from the market. |
Barriers to entry and exit exist (legal, technological, financial). |
| Market Power |
No individual market power; firms are price takers. |
Firms may have significant market power. |
| Information |
Perfect knowledge among buyers and sellers. |
Imperfect information; buyers may lack full knowledge. |
| Examples |
Agricultural markets (e.g., wheat, rice in open markets). |
Smartphone market (monopolistic), airline industry (oligopoly), utility providers (monopoly). |
| Non-Price Competition |
None; all competition is price-based. |
Significant; includes branding, quality, customer service, etc. |
| Efficiency |
Highly efficient both allocatively and productively. |
Less efficient due to pricing above marginal cost and limited output. |
| Profit in Long Run |
Firms earn normal profit due to free entry/exit. |
Firms may earn supernormal profits in the long run if barriers exist. |
| Examples of Firms |
Local farmers in open markets. |
Apple, Coca-Cola, Amazon, airlines, telecom providers. |
| Price Elasticity |
Perfectly elastic demand curve for individual firms. |
Downward-sloping demand curve for firms. |
| Consumer Choice |
Limited to identical goods. |
Wide variety of products and features to choose from. |
| Regulation Need |
Usually minimal regulation needed. |
May require antitrust laws or regulatory oversight. |
Perfect Competition vs Imperfect Competition