Compare perfect competition and a monopoly.

Perfect competition and monopoly are two opposite types of market structure. First of all, a perfectly competitive market has a large number of sellers whereas a monopolistic market has only one seller. The barriers to entry to the market in perfect competition are very low. On the other hand, the barriers to entry into a monopolistic market are very high. The products or services offered in perfect competition are perfect substitutes. In contrast, in a monopolistic market, there are no close substitutes. The firms that are part of perfect competition are price takers and on the contrary, the monopolistic firm is a price maker. In the long-run, a perfectly competitive firm cannot obtain positive economic profits but a monopolistic firm is able to obtain positive economic profits in the long-run. Finally, the demand for perfect competition is perfectly elastic whereas the demand in a monopoly is perfectly inelastic