Perfect Competition Monopolistic Competition Oligopoly Monopoly Number of firms

Question

Perfect Competition

Monopolistic Competition

Oligopoly

Monopoly

Number of firms

Differentiated or homogeneous product?

Barriers to entry?

Slope of demand curve for the firm?

Are profits possible in the short run?

Are profits possible in the long run?

What is the relationship between P and MC in the short run?

What is the relationship between P and MC in the long run?

Perfect Competition

Monopolistic Competition

Oligopoly

Monopoly

Number of firms

Differentiated or homogeneous product?

Barriers to entry?

Slope of demand curve for the firm?

Are profits possible in the short run?

Are profits possible in the long run?

What is the relationship between P and MC in the short run?

What is the relationship between P and MC in the long run?

Explanation / Answer

Perfect Competition

Monopolistic Competition

Oligopoly

Monopoly

Number of firms

Many

Less as compared with perfect competition but more than that in oligopoly

Few

one

Differentiated or homogeneous product?

Homogeneous

Differentiated

Differentiated or Homogeneous depending on type o

Barriers to entry?

no

yes

yes

yes

Slope of demand curve for the firm?

0

Negative

  Negative

  Negative

Are profits possible in the short run?

YES

YES

YES

YES

Are profits possible in the long run?

NO

NO

YES

YES

What is the relationship between P and MC in the short run?

P = MC

Because P = MR = MC

P>MC

P = AR > MR

P>MC

P>MC

What is the relationship between P and MC in the long run?

P = MC

P>MC

P>MC

P>MC

Perfect Competition

Monopolistic Competition

Oligopoly

Monopoly

Number of firms

Many

Less as compared with perfect competition but more than that in oligopoly

Few

one

Differentiated or homogeneous product?

Homogeneous

Differentiated

Differentiated or Homogeneous depending on type o

Barriers to entry?

no

yes

yes

yes

Slope of demand curve for the firm?

0

Negative

  Negative

  Negative

Are profits possible in the short run?

YES

YES

YES

YES

Are profits possible in the long run?

NO

NO

YES

YES

What is the relationship between P and MC in the short run?

P = MC

Because P = MR = MC

P>MC

P = AR > MR

P>MC

P>MC

What is the relationship between P and MC in the long run?

P = MC

P>MC

P>MC

P>MC

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