Which statement accurately describes the key similarities and differences between a monopoly and monopolistic competition?

Monopoly & Competition MCQs for PPSC, FPSC, NTS, and Pakistan government job tests. Select an option below, then read the explanation.

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Subject
Monopoly & Competitioneconomics-mcqs › monopoly-competition
Published
30 May 2019
Last updated
28 May 2026

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Explanation

Monopolists can sustain economic profits over time due to barriers to entry, whereas firms in monopolistic competition face no such barriers, leading to zero economic profits in the long run. Both market structures involve downward-sloping demand curves, but only monopolies maintain long-run profits. Additionally, neither necessarily produces at the efficient scale.

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