← Market structures and marginal analysis
Perfect competition vs monopoly
Characteristics → long-run profit → efficiency judgement.| Perfect competition | Monopoly | |
|---|---|---|
| Firms / entry | Many; free entry | One; barriers |
| Price setting | Price TAKER (P = MR) | Price MAKER (P > MR) |
| Long-run profit | Normal only | Economic profit possible |
| Allocative efficiency | P = MC ✓ | P > MC ✗ (DWL) |
| Productive efficiency | Min AC ✓ | Not at min AC ✗ |
The judgement: monopoly loses welfare through restricted output, but scale economies or innovation funding can partly offset — argue both sides for Excellence.
⚠Name the graph — every schedule checks for it
Real marking schedules for this standard explicitly cap answers that never refer to the graph by name ("Graph One", "Graph Two"). A correct verbal explanation of price, output and profit with no reference to the diagram routinely stays at Achieved; the same explanation with "as shown on Graph One" reaches Merit or Excellence. Build the habit of writing the graph reference into the sentence, not just annotating the diagram itself.A fast check for a compare-and-contrast answer
- Have I named the graph, every time I refer to a curve or a shaded area?
- Have I stated the difference explicitly (e.g. "unlike perfect competition, monopoly..."), not just described each structure separately?