Question

State with reason whether you agree or disagree with the following statements

Perfect Competition means Monopolistic Competition.

Answer 1

No, the statement given above is not correct. Perfect competition and monopolistic competition are two different market forms. Although in both the markets there exists a large number of buyers and sellers, one of the basic differences between the two is that while in perfect competition, the products sold by different firms are homogenous in nature, as against this is monopolistic competition, the firms sell differentiated products.