The following are the major similarities between perfect competition and monopoly:
- Goal: Under both market structures, the goal of the firm is to maximize profit.
- Equilibrium condition: Under both market structures, MC = MR gives equilibrium of the firm, and the slop of MC is greater than the slope of MR curves at the equilibrium point.
- Cost function: Due to the operation of law of diminishing returns, AC and MC curves under both structures are U-shaped.