The distinction between Monopoly and Monopolistic Competiton On the basis of Average Revenue:
Under monopoly, average revenue and marginal revenue curves are two separate curves.
AR curve represents the price of different units and MR curve represents the marginal revenue of different units. Both the curves are downward sloping, meaning thereby that if the monopolist intends selling more units, he will have to lower the price per units.
Under monopolistic competition also, AR and MR curves are two separate curves. The slope > downward from left to right. But both these curves are more elastic than the curves under monopoly.
On the basis of Entry of Firms: Under monopolistic competition, there are no restrictions on the new firms to enter into and the old ones to leave the group. However, this entry and exit are not so easy in the short-period. It is possible in the long-run only. But under a monopoly, there are restrictions on the entry of new firms.
