Question

1. Compare the equilibrium quantity and price (in general) of each of the following pairs of markets:
   1. Perfect Competition and Monopolistic Competition
   2. Monopoly and Oligopoly (non-colluding firms)
   3. Monopoly and Oligopoly (colluding firms)

Answer 1

A.

Perfect competition and monopolistic competition:

Among All the forms of market competition,perfect competition produces the highest quantity of output and charges the least price.

The number of firms is also highest in perfect competition.

Monopolistic competition produces less quantity of output and charge higher price than perfect competition.

B.

Monopoly and non colluding oligopoly:

Among all of the forms of market, Monopoly firm produces the least output and charges the highest price.

Non colluding oligopoly produces more output and charge less price than the Monopoly.

C.

Monopoly and colluding oligopoly:

When two or more oligopoly firms collude, they form a colluding oligopoly, which act as a multiplant monopolist. So, in terms of equilibrium quantity and price, both of them are same.