The features of monopoly are: 1) Single Seller: Under Monopoly, there is a single seller selling the product. As a result, the monopoly firm and industry are one and the same thing and monopolist has fall control over the supply and price of the product. However, there are large no. of buyers of monopoly product and no single buyer can influence the market price. 2) No close substitutes: The product by a monopolist has no close substitutes. So, the monopoly firm has no fear of competition from new or existing products. For example, there is no close substitutes of electricity services provided by TPDDL in some parts of Delhi. However, the product may have distant substitutes like inverter and generator.
The features of Monopolistic Competition are as follows: 1) Large no. of Sellers: There are large no. of firms selling closely related, but not homogeneous products. Each firm acts independently and has a limited share of the market. So, an individual firm has limited control over the market price. Large no. of firms leads to competition in the market. 2) Product differentiation: Each firm is in a position to exercise some degree of monopoly through product differentiation. Product differentiation refers to differentiating the products on the basis of brand, size, color, shape, etc. The product of a firm is close, but not substitute of other firm.
