...Question 3 Perfect Competition and Monopoly (a) I. Explain perfect competition and monopoly market structures, and identify the key factors that distinguish them. Perfect Competition Market In economic theory, the perfect competition is a market form in which no producer or consumer has the power to influence prices in the market. According to the website wordIQ.com, in order to classify the market is a perfect competition market, the market must match below criteria: 1. There are a large number of small producers and consumers on a given market 2. None of the producers or consumers can influence the price on their own (ie. Price takers) 3. Goods and services are perfect substitute (ie. The goods or services is homogeneous) 4. All resources are perfectly mobile 5. There is no transaction cost 6. The price is determined at the level that equates supply and demand, and moves instantaneously to equilibrium Monopoly Market Structure A monopoly market structure is completely different from the perfect market structure. It is a persistent market, with one and only supplier of the particular product or service. Since there is only one supplier, it can control the supply level, and therefore, it has the...