Question

monopoly vs monopolistic competition vs natural monoply what are the key differences and is the demand curve graphed differently?

Answer 1

A firm is considered as a monopoly when they are only a single firm in the market and there are barriers to entry like patent, access to resources or other government imposed laws that allow the firm to become a monopoly. A natural monopoly is a situation when the firms in only producing the goods in the market because if they are the only firm they will produce goods at a price that will be lesser as compared to many small firms producing the goods in the market. here, also there is a barrier to entry due to economies of scale of the firm

in a monopolistic industry the firms are freely allowed to enter the market. and there is no barriers to entry and these firms make no profit in the long run. the demand curve of all these firms are same.