Both monopolistic and competitive markets are market structures with many basic differences such as market share, price controls, and entry barriers. The monopolistic market is characterized by the dominance of “one company” on the market, as it determines the price level and the level of supply and demand for products and services in the market, where the dominant company owns a total share of the market, creating difficulties in entry and exit points, which prevents companies from entering the monopolistic market due to many obstacles .
As for the competitive marketةخ, it is under the control of multiple companies, not just one, and the monopoly market is as such, and for this reason competition takes place, then the share of each company in the market is very small, enter this market has lower barriers than monopoly; This allows companies to get in and out easily.
Buyers do not have the option to purchase the goods or services of the company in a monopolistic market, which includes only one seller, unlike a competitive market which allows consumers to choose to buy goods and services since there are a large number of buyers and sellers.
However, profits in a competitive market do not increase as in the case of a monopoly, because it is simply enough to stay in business, because if this happens, other firms can enter a market that reduces their profits, except when there is more than one firm involved in a product or service production; That is, each firm produces a small part of the entire industry, which is what causes firms to lose control of prices.
Monopolistic competition lies between a monopolistic market and a competitive market, because it combines the nature of a monopolistic and competitive market, all firms have a certain degree of control over the market, and therefore invest very little. barriers to market entry; What makes it comparable to a competitive market.
Moreover, it includes many producers and consumers, but the products of this market are close substitutes as compared to monopolistic and competitive markets. Products in a monopolistic market do not have any substitutes, while products in a competitive market are diverse but identical, and prices are in the hands of buyers.
The existence of pure monopolistic markets is very rare, and perhaps almost impossible, especially when there are no absolute barriers to entry, such as the prohibition of competition or the acquisition of all natural resources by firms, which brings us back to the real world; true ; Markets consist of a mixture of monopolistic and competitive markets.