Q.Distinguish between perfect competition and monopoly on the basis of the number of sellers, nature of the product, and control over price.

Perfect competition and monopoly sit at opposite ends of the market-form spectrum in terms of how many firms compete and who controls price.

The two market forms differ on almost every criterion used to classify markets:

Under perfect competition, because there are so many small sellers of an identical product, no single firm can influence the market price by changing its own output — it simply accepts the price set by the interaction of total industry demand and supply. Under monopoly, by contrast, there is only one seller controlling the entire supply of a good that has no close substitute, so the firm's own output decision is the industry's output decision, and it can set the price (though it still has to move along the market demand curve — a monopolist cannot simultaneously fix both price and quantity independently of demand).

A frequent error is saying monopoly has 'no demand curve to worry about' — a monopolist still faces the market demand curve; it just gets to choose where on that curve to operate.